Correlation Between Sino Platinum and Fujian Newland
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By analyzing existing cross correlation between Sino Platinum Metals Co and Fujian Newland Computer, you can compare the effects of market volatilities on Sino Platinum and Fujian Newland 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 Sino Platinum with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Platinum and Fujian Newland.
Diversification Opportunities for Sino Platinum and Fujian Newland
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sino and Fujian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals Co and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Sino Platinum 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 Sino Platinum Metals Co are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Sino Platinum i.e., Sino Platinum and Fujian Newland go up and down completely randomly.
Pair Corralation between Sino Platinum and Fujian Newland
Assuming the 90 days trading horizon Sino Platinum is expected to generate 3.53 times less return on investment than Fujian Newland. But when comparing it to its historical volatility, Sino Platinum Metals Co is 1.66 times less risky than Fujian Newland. It trades about 0.11 of its potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,220 in Fujian Newland Computer on August 29, 2024 and sell it today you would earn a total of 718.00 from holding Fujian Newland Computer or generate 58.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Platinum Metals Co vs. Fujian Newland Computer
Performance |
| Timeline |
| Sino Platinum Metals |
| Fujian Newland Computer |
Sino Platinum and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino Platinum and Fujian Newland
The main advantage of trading using opposite Sino Platinum and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Platinum position performs unexpectedly, Fujian Newland 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 Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Sino Platinum vs. Wanhua Chemical Group | Sino Platinum vs. Baoshan Iron Steel | Sino Platinum vs. Shandong Gold Mining | Sino Platinum vs. Rongsheng Petrochemical Co |
| Fujian Newland vs. China State Construction | Fujian Newland vs. Huafa Industrial Co | Fujian Newland vs. China International Capital | Fujian Newland vs. Kweichow Moutai Co |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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