Correlation Between Smartgiant Technology and Fangda Special
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By analyzing existing cross correlation between Smartgiant Technology Co and Fangda Special Steel, you can compare the effects of market volatilities on Smartgiant Technology and Fangda Special 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 Smartgiant Technology with a short position of Fangda Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartgiant Technology and Fangda Special.
Diversification Opportunities for Smartgiant Technology and Fangda Special
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smartgiant and Fangda is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Smartgiant Technology Co and Fangda Special Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fangda Special Steel and Smartgiant Technology 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 Smartgiant Technology Co are associated (or correlated) with Fangda Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fangda Special Steel has no effect on the direction of Smartgiant Technology i.e., Smartgiant Technology and Fangda Special go up and down completely randomly.
Pair Corralation between Smartgiant Technology and Fangda Special
Assuming the 90 days trading horizon Smartgiant Technology Co is expected to under-perform the Fangda Special. In addition to that, Smartgiant Technology is 1.07 times more volatile than Fangda Special Steel. It trades about -0.2 of its total potential returns per unit of risk. Fangda Special Steel is currently generating about 0.03 per unit of volatility. If you would invest 409.00 in Fangda Special Steel on October 30, 2024 and sell it today you would earn a total of 5.00 from holding Fangda Special Steel or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartgiant Technology Co vs. Fangda Special Steel
Performance |
| Timeline |
| Smartgiant Technology |
| Fangda Special Steel |
Smartgiant Technology and Fangda Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartgiant Technology and Fangda Special
The main advantage of trading using opposite Smartgiant Technology and Fangda Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartgiant Technology position performs unexpectedly, Fangda Special 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 Fangda Special will offset losses from the drop in Fangda Special's long position.The idea behind Smartgiant Technology Co and Fangda Special Steel 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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