Correlation Between San Neng and Trusval Technology
Can any of the company-specific risk be diversified away by investing in both San Neng and Trusval Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining San Neng and Trusval Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Neng Group and Trusval Technology Co, you can compare the effects of market volatilities on San Neng and Trusval Technology 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 San Neng with a short position of Trusval Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Neng and Trusval Technology.
Diversification Opportunities for San Neng and Trusval Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between San and Trusval is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding San Neng Group and Trusval Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trusval Technology and San Neng 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 San Neng Group are associated (or correlated) with Trusval Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trusval Technology has no effect on the direction of San Neng i.e., San Neng and Trusval Technology go up and down completely randomly.
Pair Corralation between San Neng and Trusval Technology
Assuming the 90 days trading horizon San Neng Group is expected to under-perform the Trusval Technology. But the stock apears to be less risky and, when comparing its historical volatility, San Neng Group is 4.04 times less risky than Trusval Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Trusval Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 18,550 in Trusval Technology Co on September 1, 2024 and sell it today you would lose (100.00) from holding Trusval Technology Co or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Neng Group vs. Trusval Technology Co
Performance |
| Timeline |
| San Neng Group |
| Trusval Technology |
San Neng and Trusval Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Neng and Trusval Technology
The main advantage of trading using opposite San Neng and Trusval Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Neng position performs unexpectedly, Trusval Technology 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 Trusval Technology will offset losses from the drop in Trusval Technology's long position.The idea behind San Neng Group and Trusval Technology Co 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.| Trusval Technology vs. Sunonwealth Electric Machine | Trusval Technology vs. Rechi Precision Co | Trusval Technology vs. Fittech Co | Trusval Technology vs. C Sun Manufacturing |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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