Correlation Between Shanghai Shuixing and Sinomach General
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By analyzing existing cross correlation between Shanghai Shuixing Home and Sinomach General Machinery, you can compare the effects of market volatilities on Shanghai Shuixing 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 Shanghai Shuixing with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Shuixing and Sinomach General.
Diversification Opportunities for Shanghai Shuixing and Sinomach General
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shanghai and Sinomach is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Shuixing Home 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 Shanghai Shuixing 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 Shanghai Shuixing Home 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 Shanghai Shuixing i.e., Shanghai Shuixing and Sinomach General go up and down completely randomly.
Pair Corralation between Shanghai Shuixing and Sinomach General
Assuming the 90 days trading horizon Shanghai Shuixing is expected to generate 1.37 times less return on investment than Sinomach General. But when comparing it to its historical volatility, Shanghai Shuixing Home is 1.4 times less risky than Sinomach General. It trades about 0.03 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,322 in Sinomach General Machinery on September 5, 2024 and sell it today you would earn a total of 364.00 from holding Sinomach General Machinery or generate 27.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Shuixing Home vs. Sinomach General Machinery
Performance |
| Timeline |
| Shanghai Shuixing Home |
| Sinomach General Mac |
Shanghai Shuixing and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Shuixing and Sinomach General
The main advantage of trading using opposite Shanghai Shuixing and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Shuixing 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.| Shanghai Shuixing vs. Qingdao Choho Industrial | Shanghai Shuixing vs. GRINM Semiconductor Materials | Shanghai Shuixing vs. Shandong Mining Machinery | Shanghai Shuixing vs. Juewei Food Co |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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