Correlation Between Sinocat Environmental and DO Home
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By analyzing existing cross correlation between Sinocat Environmental Technology and DO Home Collection, you can compare the effects of market volatilities on Sinocat Environmental and DO Home 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 Sinocat Environmental with a short position of DO Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and DO Home.
Diversification Opportunities for Sinocat Environmental and DO Home
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sinocat and 002798 is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and DO Home Collection in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DO Home Collection and Sinocat Environmental 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 Sinocat Environmental Technology are associated (or correlated) with DO Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DO Home Collection has no effect on the direction of Sinocat Environmental i.e., Sinocat Environmental and DO Home go up and down completely randomly.
Pair Corralation between Sinocat Environmental and DO Home
Assuming the 90 days trading horizon Sinocat Environmental is expected to generate 8.25 times less return on investment than DO Home. In addition to that, Sinocat Environmental is 1.03 times more volatile than DO Home Collection. It trades about 0.0 of its total potential returns per unit of risk. DO Home Collection is currently generating about 0.03 per unit of volatility. If you would invest 411.00 in DO Home Collection on September 3, 2024 and sell it today you would earn a total of 33.00 from holding DO Home Collection or generate 8.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinocat Environmental Technolo vs. DO Home Collection
Performance |
| Timeline |
| Sinocat Environmental |
| DO Home Collection |
Sinocat Environmental and DO Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocat Environmental and DO Home
The main advantage of trading using opposite Sinocat Environmental and DO Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental position performs unexpectedly, DO Home 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 DO Home will offset losses from the drop in DO Home's long position.| Sinocat Environmental vs. PetroChina Co Ltd | Sinocat Environmental vs. China Mobile Limited | Sinocat Environmental vs. Industrial and Commercial | Sinocat Environmental vs. China Life Insurance |
| DO Home vs. Anhui Jianghuai Automobile | DO Home vs. Sinomach Automobile Co | DO Home vs. Zotye Automobile Co | DO Home vs. Shuhua Sports Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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