Correlation Between Sinocat Environmental and Markor International
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By analyzing existing cross correlation between Sinocat Environmental Technology and Markor International Home, you can compare the effects of market volatilities on Sinocat Environmental and Markor International 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 Markor International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and Markor International.
Diversification Opportunities for Sinocat Environmental and Markor International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinocat and Markor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and Markor International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markor International Home 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 Markor International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markor International Home has no effect on the direction of Sinocat Environmental i.e., Sinocat Environmental and Markor International go up and down completely randomly.
Pair Corralation between Sinocat Environmental and Markor International
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to generate 0.79 times more return on investment than Markor International. However, Sinocat Environmental Technology is 1.27 times less risky than Markor International. It trades about -0.01 of its potential returns per unit of risk. Markor International Home is currently generating about -0.14 per unit of risk. 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinocat Environmental Technolo vs. Markor International Home
Performance |
| Timeline |
| Sinocat Environmental |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Markor International Home |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sinocat Environmental and Markor International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocat Environmental and Markor International
The main advantage of trading using opposite Sinocat Environmental and Markor International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental position performs unexpectedly, Markor International 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 Markor International will offset losses from the drop in Markor International's long position.The idea behind Sinocat Environmental Technology and Markor International Home 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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