Correlation Between New China and SI TECH
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By analyzing existing cross correlation between New China Life and SI TECH Information Technology, you can compare the effects of market volatilities on New China and SI TECH 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 New China with a short position of SI TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of New China and SI TECH.
Diversification Opportunities for New China and SI TECH
Poor diversification
The 3 months correlation between New and 300608 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding New China Life and SI TECH Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SI TECH Information and New China 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 New China Life are associated (or correlated) with SI TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SI TECH Information has no effect on the direction of New China i.e., New China and SI TECH go up and down completely randomly.
Pair Corralation between New China and SI TECH
Assuming the 90 days trading horizon New China is expected to generate 1.19 times less return on investment than SI TECH. But when comparing it to its historical volatility, New China Life is 1.86 times less risky than SI TECH. It trades about 0.05 of its potential returns per unit of risk. SI TECH Information Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 861.00 in SI TECH Information Technology on September 28, 2024 and sell it today you would earn a total of 255.00 from holding SI TECH Information Technology or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
New China Life vs. SI TECH Information Technology
Performance |
| Timeline |
| New China Life |
| SI TECH Information |
New China and SI TECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New China and SI TECH
The main advantage of trading using opposite New China and SI TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New China position performs unexpectedly, SI TECH 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 SI TECH will offset losses from the drop in SI TECH's long position.| New China vs. Grandblue Environment Co | New China vs. Shenzhen Centralcon Investment | New China vs. Henan Shuanghui Investment | New China vs. Nuode Investment Co |
| SI TECH vs. Kweichow Moutai Co | SI TECH vs. Shenzhen Mindray Bio Medical | SI TECH vs. Jiangsu Pacific Quartz | SI TECH vs. G bits Network Technology |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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