Correlation Between Dalian Thermal and Sino Wealth
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By analyzing existing cross correlation between Dalian Thermal Power and Sino Wealth Electronic, you can compare the effects of market volatilities on Dalian Thermal and Sino Wealth 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 Dalian Thermal with a short position of Sino Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Sino Wealth.
Diversification Opportunities for Dalian Thermal and Sino Wealth
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dalian and Sino is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Sino Wealth Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Wealth Electronic and Dalian Thermal 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 Dalian Thermal Power are associated (or correlated) with Sino Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Wealth Electronic has no effect on the direction of Dalian Thermal i.e., Dalian Thermal and Sino Wealth go up and down completely randomly.
Pair Corralation between Dalian Thermal and Sino Wealth
Assuming the 90 days trading horizon Dalian Thermal Power is expected to generate 1.1 times more return on investment than Sino Wealth. However, Dalian Thermal is 1.1 times more volatile than Sino Wealth Electronic. It trades about 0.02 of its potential returns per unit of risk. Sino Wealth Electronic is currently generating about 0.01 per unit of risk. If you would invest 761.00 in Dalian Thermal Power on September 1, 2024 and sell it today you would earn a total of 29.00 from holding Dalian Thermal Power or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Dalian Thermal Power vs. Sino Wealth Electronic
Performance |
| Timeline |
| Dalian Thermal Power |
| Sino Wealth Electronic |
Dalian Thermal and Sino Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Sino Wealth
The main advantage of trading using opposite Dalian Thermal and Sino Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal position performs unexpectedly, Sino Wealth 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 Sino Wealth will offset losses from the drop in Sino Wealth's long position.| Dalian Thermal vs. Lutian Machinery Co | Dalian Thermal vs. China Longyuan Power | Dalian Thermal vs. PetroChina Co Ltd | Dalian Thermal vs. Bank of China |
| Sino Wealth vs. Fiberhome Telecommunication Technologies | Sino Wealth vs. Jilin Jlu Communication | Sino Wealth vs. PKU HealthCare Corp | Sino Wealth vs. Impulse Qingdao Health |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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