Correlation Between Beijing Roborock and Sinocat Environmental
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By analyzing existing cross correlation between Beijing Roborock Technology and Sinocat Environmental Technology, you can compare the effects of market volatilities on Beijing Roborock and Sinocat Environmental 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 Beijing Roborock with a short position of Sinocat Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Roborock and Sinocat Environmental.
Diversification Opportunities for Beijing Roborock and Sinocat Environmental
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and Sinocat is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Roborock Technology and Sinocat Environmental Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinocat Environmental and Beijing Roborock 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 Beijing Roborock Technology are associated (or correlated) with Sinocat Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinocat Environmental has no effect on the direction of Beijing Roborock i.e., Beijing Roborock and Sinocat Environmental go up and down completely randomly.
Pair Corralation between Beijing Roborock and Sinocat Environmental
Assuming the 90 days trading horizon Beijing Roborock Technology is expected to under-perform the Sinocat Environmental. In addition to that, Beijing Roborock is 1.1 times more volatile than Sinocat Environmental Technology. It trades about -0.05 of its total potential returns per unit of risk. Sinocat Environmental Technology is currently generating about -0.01 per unit of volatility. If you would invest 1,641 in Sinocat Environmental Technology on November 7, 2024 and sell it today you would lose (14.00) from holding Sinocat Environmental Technology or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Roborock Technology vs. Sinocat Environmental Technolo
Performance |
| Timeline |
| Beijing Roborock Tec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Sinocat Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Beijing Roborock and Sinocat Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Roborock and Sinocat Environmental
The main advantage of trading using opposite Beijing Roborock and Sinocat Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Roborock position performs unexpectedly, Sinocat Environmental 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 Sinocat Environmental will offset losses from the drop in Sinocat Environmental's long position.The idea behind Beijing Roborock Technology and Sinocat Environmental Technology 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.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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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