Correlation Between Caihong Display and Sinomach General
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By analyzing existing cross correlation between Caihong Display Devices and Sinomach General Machinery, you can compare the effects of market volatilities on Caihong Display and Sinomach General 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 Caihong Display with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Sinomach General.
Diversification Opportunities for Caihong Display and Sinomach General
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caihong and Sinomach is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Sinomach General Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach General Mac and Caihong Display 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 Caihong Display Devices are associated (or correlated) with Sinomach General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach General Mac has no effect on the direction of Caihong Display i.e., Caihong Display and Sinomach General go up and down completely randomly.
Pair Corralation between Caihong Display and Sinomach General
Assuming the 90 days trading horizon Caihong Display is expected to generate 5.83 times less return on investment than Sinomach General. But when comparing it to its historical volatility, Caihong Display Devices is 1.26 times less risky than Sinomach General. It trades about 0.02 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,214 in Sinomach General Machinery on September 5, 2024 and sell it today you would earn a total of 472.00 from holding Sinomach General Machinery or generate 38.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.17% |
| Values | Daily Returns |
Caihong Display Devices vs. Sinomach General Machinery
Performance |
| Timeline |
| Caihong Display Devices |
| Sinomach General Mac |
Caihong Display and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Sinomach General
The main advantage of trading using opposite Caihong Display and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display position performs unexpectedly, Sinomach General 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 Sinomach General will offset losses from the drop in Sinomach General's long position.| Caihong Display vs. Emdoor Information Co | Caihong Display vs. Shuhua Sports Co | Caihong Display vs. Guangdong Brandmax Marketing | Caihong Display vs. ButOne Information Corp |
| Sinomach General vs. Caihong Display Devices | Sinomach General vs. Markor International Home | Sinomach General vs. Shanghai Shuixing Home | Sinomach General vs. Hunan Mendale Hometextile |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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