Correlation Between Sinocat Environmental and Spring Airlines
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By analyzing existing cross correlation between Sinocat Environmental Technology and Spring Airlines Co, you can compare the effects of market volatilities on Sinocat Environmental and Spring Airlines 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 Spring Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and Spring Airlines.
Diversification Opportunities for Sinocat Environmental and Spring Airlines
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sinocat and Spring is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and Spring Airlines Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Airlines 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 Spring Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Airlines has no effect on the direction of Sinocat Environmental i.e., Sinocat Environmental and Spring Airlines go up and down completely randomly.
Pair Corralation between Sinocat Environmental and Spring Airlines
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to under-perform the Spring Airlines. In addition to that, Sinocat Environmental is 1.85 times more volatile than Spring Airlines Co. It trades about -0.03 of its total potential returns per unit of risk. Spring Airlines Co is currently generating about -0.01 per unit of volatility. If you would invest 6,360 in Spring Airlines Co on October 31, 2024 and sell it today you would lose (962.00) from holding Spring Airlines Co or give up 15.13% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sinocat Environmental Technolo vs. Spring Airlines Co
Performance |
Timeline |
Sinocat Environmental |
Spring Airlines |
Sinocat Environmental and Spring Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinocat Environmental and Spring Airlines
The main advantage of trading using opposite Sinocat Environmental and Spring Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental position performs unexpectedly, Spring Airlines 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 Spring Airlines will offset losses from the drop in Spring Airlines' long position.The idea behind Sinocat Environmental Technology and Spring Airlines Co 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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