Correlation Between Sinomach General and Huitong Construction
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By analyzing existing cross correlation between Sinomach General Machinery and Huitong Construction Group, you can compare the effects of market volatilities on Sinomach General and Huitong Construction 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 Huitong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Huitong Construction.
Diversification Opportunities for Sinomach General and Huitong Construction
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinomach and Huitong is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Huitong Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huitong Construction 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 Huitong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huitong Construction has no effect on the direction of Sinomach General i.e., Sinomach General and Huitong Construction go up and down completely randomly.
Pair Corralation between Sinomach General and Huitong Construction
Assuming the 90 days trading horizon Sinomach General is expected to generate 1.15 times less return on investment than Huitong Construction. In addition to that, Sinomach General is 1.92 times more volatile than Huitong Construction Group. It trades about 0.06 of its total potential returns per unit of risk. Huitong Construction Group is currently generating about 0.13 per unit of volatility. If you would invest 497.00 in Huitong Construction Group on August 26, 2024 and sell it today you would earn a total of 31.00 from holding Huitong Construction Group or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. Huitong Construction Group
Performance |
| Timeline |
| Sinomach General Mac |
| Huitong Construction |
Sinomach General and Huitong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Huitong Construction
The main advantage of trading using opposite Sinomach General and Huitong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Huitong Construction 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 Huitong Construction will offset losses from the drop in Huitong Construction'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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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