Correlation Between Sinocat Environmental and Shengyi Technology
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By analyzing existing cross correlation between Sinocat Environmental Technology and Shengyi Technology Co, you can compare the effects of market volatilities on Sinocat Environmental and Shengyi 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 Sinocat Environmental with a short position of Shengyi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and Shengyi Technology.
Diversification Opportunities for Sinocat Environmental and Shengyi Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinocat and Shengyi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and Shengyi Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shengyi Technology 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 Shengyi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shengyi Technology has no effect on the direction of Sinocat Environmental i.e., Sinocat Environmental and Shengyi Technology go up and down completely randomly.
Pair Corralation between Sinocat Environmental and Shengyi Technology
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to under-perform the Shengyi Technology. In addition to that, Sinocat Environmental is 1.39 times more volatile than Shengyi Technology Co. It trades about -0.01 of its total potential returns per unit of risk. Shengyi Technology Co is currently generating about 0.05 per unit of volatility. If you would invest 1,781 in Shengyi Technology Co on September 12, 2024 and sell it today you would earn a total of 501.00 from holding Shengyi Technology Co or generate 28.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinocat Environmental Technolo vs. Shengyi Technology Co
Performance |
| Timeline |
| Sinocat Environmental |
| Shengyi Technology |
Sinocat Environmental and Shengyi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocat Environmental and Shengyi Technology
The main advantage of trading using opposite Sinocat Environmental and Shengyi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental position performs unexpectedly, Shengyi 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 Shengyi Technology will offset losses from the drop in Shengyi Technology's long position.| Sinocat Environmental vs. Lutian Machinery Co | Sinocat Environmental vs. PetroChina Co Ltd | Sinocat Environmental vs. Bank of China | Sinocat Environmental vs. Gansu Jiu Steel |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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