Correlation Between Sanxiang Advanced and Guilin Seamild
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By analyzing existing cross correlation between Sanxiang Advanced Materials and Guilin Seamild Foods, you can compare the effects of market volatilities on Sanxiang Advanced and Guilin Seamild 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 Sanxiang Advanced with a short position of Guilin Seamild. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanxiang Advanced and Guilin Seamild.
Diversification Opportunities for Sanxiang Advanced and Guilin Seamild
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sanxiang and Guilin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sanxiang Advanced Materials and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild Foods and Sanxiang Advanced 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 Sanxiang Advanced Materials are associated (or correlated) with Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of Sanxiang Advanced i.e., Sanxiang Advanced and Guilin Seamild go up and down completely randomly.
Pair Corralation between Sanxiang Advanced and Guilin Seamild
Assuming the 90 days trading horizon Sanxiang Advanced Materials is expected to generate 1.29 times more return on investment than Guilin Seamild. However, Sanxiang Advanced is 1.29 times more volatile than Guilin Seamild Foods. It trades about 0.07 of its potential returns per unit of risk. Guilin Seamild Foods is currently generating about 0.09 per unit of risk. If you would invest 1,307 in Sanxiang Advanced Materials on October 18, 2024 and sell it today you would earn a total of 370.00 from holding Sanxiang Advanced Materials or generate 28.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sanxiang Advanced Materials vs. Guilin Seamild Foods
Performance |
| Timeline |
| Sanxiang Advanced |
| Guilin Seamild Foods |
Sanxiang Advanced and Guilin Seamild Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanxiang Advanced and Guilin Seamild
The main advantage of trading using opposite Sanxiang Advanced and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanxiang Advanced position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild's long position.The idea behind Sanxiang Advanced Materials and Guilin Seamild Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Guilin Seamild vs. Sanxiang Advanced Materials | Guilin Seamild vs. Heilongjiang Transport Development | Guilin Seamild vs. Hubeiyichang Transportation Group | Guilin Seamild vs. Chongqing Sulian Plastic |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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