Correlation Between Sinomach General and Wuhan Yangtze
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By analyzing existing cross correlation between Sinomach General Machinery and Wuhan Yangtze Communication, you can compare the effects of market volatilities on Sinomach General and Wuhan Yangtze and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sinomach General with a short position of Wuhan Yangtze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Wuhan Yangtze.
Diversification Opportunities for Sinomach General and Wuhan Yangtze
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinomach and Wuhan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Wuhan Yangtze Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuhan Yangtze Commun and Sinomach General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sinomach General Machinery are associated (or correlated) with Wuhan Yangtze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuhan Yangtze Commun has no effect on the direction of Sinomach General i.e., Sinomach General and Wuhan Yangtze go up and down completely randomly.
Pair Corralation between Sinomach General and Wuhan Yangtze
Assuming the 90 days trading horizon Sinomach General Machinery is expected to under-perform the Wuhan Yangtze. But the stock apears to be less risky and, when comparing its historical volatility, Sinomach General Machinery is 1.45 times less risky than Wuhan Yangtze. The stock trades about -0.02 of its potential returns per unit of risk. The Wuhan Yangtze Communication is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,963 in Wuhan Yangtze Communication on August 27, 2024 and sell it today you would earn a total of 904.00 from holding Wuhan Yangtze Communication or generate 46.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. Wuhan Yangtze Communication
Performance |
| Timeline |
| Sinomach General Mac |
| Wuhan Yangtze Commun |
Sinomach General and Wuhan Yangtze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Wuhan Yangtze
The main advantage of trading using opposite Sinomach General and Wuhan Yangtze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Wuhan Yangtze can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wuhan Yangtze will offset losses from the drop in Wuhan Yangtze's long position.| Sinomach General vs. Agricultural Bank of | Sinomach General vs. Industrial and Commercial | Sinomach General vs. Bank of China | Sinomach General vs. China Construction Bank |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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