Correlation Between Allied Machinery and Sichuan Jinshi
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By analyzing existing cross correlation between Allied Machinery Co and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Allied Machinery and Sichuan Jinshi 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 Allied Machinery with a short position of Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Sichuan Jinshi.
Diversification Opportunities for Allied Machinery and Sichuan Jinshi
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allied and Sichuan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology and Allied Machinery 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 Allied Machinery Co are associated (or correlated) with Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Allied Machinery i.e., Allied Machinery and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Allied Machinery and Sichuan Jinshi
Assuming the 90 days trading horizon Allied Machinery Co is expected to under-perform the Sichuan Jinshi. In addition to that, Allied Machinery is 1.03 times more volatile than Sichuan Jinshi Technology. It trades about -0.04 of its total potential returns per unit of risk. Sichuan Jinshi Technology is currently generating about 0.01 per unit of volatility. If you would invest 685.00 in Sichuan Jinshi Technology on August 25, 2024 and sell it today you would earn a total of 6.00 from holding Sichuan Jinshi Technology or generate 0.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Allied Machinery Co vs. Sichuan Jinshi Technology
Performance |
Timeline |
Allied Machinery |
Sichuan Jinshi Technology |
Allied Machinery and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allied Machinery and Sichuan Jinshi
The main advantage of trading using opposite Allied Machinery and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi's long position.Allied Machinery vs. Zhejiang Qianjiang Motorcycle | Allied Machinery vs. Zotye Automobile Co | Allied Machinery vs. Fujian Longzhou Transportation | Allied Machinery vs. Songz Automobile Air |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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