Correlation Between Eyebright Medical and Sinomach General
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By analyzing existing cross correlation between Eyebright Medical Technology and Sinomach General Machinery, you can compare the effects of market volatilities on Eyebright Medical 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 Eyebright Medical with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eyebright Medical and Sinomach General.
Diversification Opportunities for Eyebright Medical and Sinomach General
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eyebright and Sinomach is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eyebright Medical Technology 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 Eyebright Medical 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 Eyebright Medical Technology 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 Eyebright Medical i.e., Eyebright Medical and Sinomach General go up and down completely randomly.
Pair Corralation between Eyebright Medical and Sinomach General
Assuming the 90 days trading horizon Eyebright Medical Technology is expected to generate 0.84 times more return on investment than Sinomach General. However, Eyebright Medical Technology is 1.19 times less risky than Sinomach General. It trades about 0.11 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about -0.17 per unit of risk. If you would invest 9,295 in Eyebright Medical Technology on October 17, 2024 and sell it today you would earn a total of 463.00 from holding Eyebright Medical Technology or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eyebright Medical Technology vs. Sinomach General Machinery
Performance |
| Timeline |
| Eyebright Medical |
| Sinomach General Mac |
Eyebright Medical and Sinomach General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eyebright Medical and Sinomach General
The main advantage of trading using opposite Eyebright Medical and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eyebright Medical 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.The idea behind Eyebright Medical Technology and Sinomach General Machinery 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.
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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