Correlation Between Shanghai Rongtai and Sinomach General
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By analyzing existing cross correlation between Shanghai Rongtai Health and Sinomach General Machinery, you can compare the effects of market volatilities on Shanghai Rongtai 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 Rongtai with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Rongtai and Sinomach General.
Diversification Opportunities for Shanghai Rongtai and Sinomach General
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Sinomach is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Rongtai Health 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 Rongtai 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 Rongtai Health 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 Rongtai i.e., Shanghai Rongtai and Sinomach General go up and down completely randomly.
Pair Corralation between Shanghai Rongtai and Sinomach General
Assuming the 90 days trading horizon Shanghai Rongtai Health is expected to generate 1.06 times more return on investment than Sinomach General. However, Shanghai Rongtai is 1.06 times more volatile than Sinomach General Machinery. It trades about -0.26 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about -0.3 per unit of risk. If you would invest 1,566 in Shanghai Rongtai Health on October 12, 2024 and sell it today you would lose (233.00) from holding Shanghai Rongtai Health or give up 14.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Rongtai Health vs. Sinomach General Machinery
Performance |
| Timeline |
| Shanghai Rongtai Health |
| Sinomach General Mac |
Shanghai Rongtai and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Rongtai and Sinomach General
The main advantage of trading using opposite Shanghai Rongtai and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Rongtai 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 Rongtai vs. Jiangsu Jinling Sports | Shanghai Rongtai vs. Xiandai Investment Co | Shanghai Rongtai vs. Success Electronics | Shanghai Rongtai vs. Beijing YanDong MicroElectronic |
| Sinomach General vs. Yunnan Jianzhijia Health Chain | Sinomach General vs. Shanghai Rongtai Health | Sinomach General vs. De Rucci Healthy | Sinomach General vs. Dezhan HealthCare Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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