Correlation Between Sinomach General and Shenzhen Transsion
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By analyzing existing cross correlation between Sinomach General Machinery and Shenzhen Transsion Holdings, you can compare the effects of market volatilities on Sinomach General and Shenzhen Transsion 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 Shenzhen Transsion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach General and Shenzhen Transsion.
Diversification Opportunities for Sinomach General and Shenzhen Transsion
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinomach and Shenzhen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach General Machinery and Shenzhen Transsion Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Transsion 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 Shenzhen Transsion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Transsion has no effect on the direction of Sinomach General i.e., Sinomach General and Shenzhen Transsion go up and down completely randomly.
Pair Corralation between Sinomach General and Shenzhen Transsion
Assuming the 90 days trading horizon Sinomach General Machinery is expected to generate 1.46 times more return on investment than Shenzhen Transsion. However, Sinomach General is 1.46 times more volatile than Shenzhen Transsion Holdings. It trades about -0.05 of its potential returns per unit of risk. Shenzhen Transsion Holdings is currently generating about -0.09 per unit of risk. If you would invest 1,701 in Sinomach General Machinery on August 29, 2024 and sell it today you would lose (98.00) from holding Sinomach General Machinery or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach General Machinery vs. Shenzhen Transsion Holdings
Performance |
| Timeline |
| Sinomach General Mac |
| Shenzhen Transsion |
Sinomach General and Shenzhen Transsion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach General and Shenzhen Transsion
The main advantage of trading using opposite Sinomach General and Shenzhen Transsion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach General position performs unexpectedly, Shenzhen Transsion 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 Shenzhen Transsion will offset losses from the drop in Shenzhen Transsion's long position.| Sinomach General vs. PetroChina Co Ltd | Sinomach General vs. China State Construction | Sinomach General vs. China Mobile Limited | Sinomach General vs. Industrial and Commercial |
| Shenzhen Transsion vs. Keeson Technology Corp | Shenzhen Transsion vs. Holitech Technology Co | Shenzhen Transsion vs. Qingdao NovelBeam Technology | Shenzhen Transsion vs. Ye Chiu Metal |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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