Correlation Between Allied Machinery and Senci Electric
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By analyzing existing cross correlation between Allied Machinery Co and Senci Electric Machinery, you can compare the effects of market volatilities on Allied Machinery and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Machinery and Senci Electric.
Diversification Opportunities for Allied Machinery and Senci Electric
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allied and Senci is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Allied Machinery Co and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of Allied Machinery i.e., Allied Machinery and Senci Electric go up and down completely randomly.
Pair Corralation between Allied Machinery and Senci Electric
Assuming the 90 days trading horizon Allied Machinery Co is expected to generate 1.34 times more return on investment than Senci Electric. However, Allied Machinery is 1.34 times more volatile than Senci Electric Machinery. It trades about 0.15 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.04 per unit of risk. 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 |
Allied Machinery Co vs. Senci Electric Machinery
Performance |
| Timeline |
| Allied Machinery |
| Senci Electric Machinery |
Allied Machinery and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Machinery and Senci Electric
The main advantage of trading using opposite Allied Machinery and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Machinery position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| Allied Machinery vs. Qtone Education Group | Allied Machinery vs. Zhejiang Publishing Media | Allied Machinery vs. Beijing Kaiwen Education | Allied Machinery vs. Wuhan Yangtze Communication |
| Senci Electric vs. Cloud Live Technology | Senci Electric vs. Nanjing Putian Telecommunications | Senci Electric vs. Tianjin Realty Development | Senci Electric vs. Shenzhen Coship Electronics |
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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