Correlation Between Senci Electric and Allied Machinery
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By analyzing existing cross correlation between Senci Electric Machinery and Allied Machinery Co, you can compare the effects of market volatilities on Senci Electric and Allied Machinery 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 Senci Electric with a short position of Allied Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and Allied Machinery.
Diversification Opportunities for Senci Electric and Allied Machinery
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senci and Allied is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and Allied Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Machinery and Senci Electric 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 Senci Electric Machinery are associated (or correlated) with Allied Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Machinery has no effect on the direction of Senci Electric i.e., Senci Electric and Allied Machinery go up and down completely randomly.
Pair Corralation between Senci Electric and Allied Machinery
Assuming the 90 days trading horizon Senci Electric is expected to generate 4.9 times less return on investment than Allied Machinery. But when comparing it to its historical volatility, Senci Electric Machinery is 1.34 times less risky than Allied Machinery. It trades about 0.04 of its potential returns per unit of risk. Allied Machinery Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,645 in Allied Machinery Co on October 15, 2024 and sell it today you would earn a total of 224.00 from holding Allied Machinery Co or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Senci Electric Machinery vs. Allied Machinery Co
Performance |
| Timeline |
| Senci Electric Machinery |
| Allied Machinery |
Senci Electric and Allied Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senci Electric and Allied Machinery
The main advantage of trading using opposite Senci Electric and Allied Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric position performs unexpectedly, Allied Machinery 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 Allied Machinery will offset losses from the drop in Allied Machinery's long position.| Senci Electric vs. Cloud Live Technology | Senci Electric vs. Nanjing Putian Telecommunications | Senci Electric vs. Tianjin Realty Development | Senci Electric vs. Shenzhen Coship Electronics |
| Allied Machinery vs. Qtone Education Group | Allied Machinery vs. Zhejiang Publishing Media | Allied Machinery vs. Beijing Kaiwen Education | Allied Machinery vs. Wuhan Yangtze Communication |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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