Correlation Between Sino-Platinum Metals and Sinofibers Technology
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By analyzing existing cross correlation between Sino Platinum Metals Co and Sinofibers Technology Co, you can compare the effects of market volatilities on Sino-Platinum Metals and Sinofibers Technology 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 Metals with a short position of Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino-Platinum Metals and Sinofibers Technology.
Diversification Opportunities for Sino-Platinum Metals and Sinofibers Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sino-Platinum and Sinofibers is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals Co and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers Technology and Sino-Platinum Metals 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 Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Sino-Platinum Metals i.e., Sino-Platinum Metals and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Sino-Platinum Metals and Sinofibers Technology
Assuming the 90 days trading horizon Sino-Platinum Metals is expected to generate 3.54 times less return on investment than Sinofibers Technology. But when comparing it to its historical volatility, Sino Platinum Metals Co is 1.53 times less risky than Sinofibers Technology. It trades about 0.06 of its potential returns per unit of risk. Sinofibers Technology Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,712 in Sinofibers Technology Co on November 7, 2024 and sell it today you would earn a total of 119.00 from holding Sinofibers Technology Co or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino Platinum Metals Co vs. Sinofibers Technology Co
Performance |
| Timeline |
| Sino Platinum Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sinofibers Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sino-Platinum Metals and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino-Platinum Metals and Sinofibers Technology
The main advantage of trading using opposite Sino-Platinum Metals and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino-Platinum Metals position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology's long position.The idea behind Sino Platinum Metals Co and Sinofibers Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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