Correlation Between Sinomach General and Shanghai Action
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By analyzing existing cross correlation between Sinomach General Machinery and Shanghai Action Education, you can compare the effects of market volatilities on Sinomach General and Shanghai Action 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 Shanghai Action. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Shanghai Action.
Diversification Opportunities for Sinomach General and Shanghai Action
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinomach and Shanghai is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Shanghai Action Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Action Education 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 Shanghai Action. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Action Education has no effect on the direction of Sinomach General i.e., Sinomach General and Shanghai Action go up and down completely randomly.
Pair Corralation between Sinomach General and Shanghai Action
Assuming the 90 days trading horizon Sinomach General Machinery is expected to under-perform the Shanghai Action. But the stock apears to be less risky and, when comparing its historical volatility, Sinomach General Machinery is 1.13 times less risky than Shanghai Action. The stock trades about -0.14 of its potential returns per unit of risk. The Shanghai Action Education is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,555 in Shanghai Action Education on September 12, 2024 and sell it today you would earn a total of 98.00 from holding Shanghai Action Education or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sinomach General Machinery vs. Shanghai Action Education
Performance |
| Timeline |
| Sinomach General Mac |
| Shanghai Action Education |
Sinomach General and Shanghai Action Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Shanghai Action
The main advantage of trading using opposite Sinomach General and Shanghai Action positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Shanghai Action 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 Shanghai Action will offset losses from the drop in Shanghai Action's long position.| Sinomach General vs. Agricultural Bank of | Sinomach General vs. Industrial and Commercial | Sinomach General vs. Bank of China | Sinomach General vs. PetroChina Co Ltd |
| Shanghai Action vs. Lutian Machinery Co | Shanghai Action vs. PetroChina Co Ltd | Shanghai Action vs. Bank of China | Shanghai Action vs. Gansu Jiu Steel |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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