Correlation Between Sinocat Environmental and Bomin Electronics
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By analyzing existing cross correlation between Sinocat Environmental Technology and Bomin Electronics Co, you can compare the effects of market volatilities on Sinocat Environmental and Bomin Electronics 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 Bomin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinocat Environmental and Bomin Electronics.
Diversification Opportunities for Sinocat Environmental and Bomin Electronics
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinocat and Bomin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sinocat Environmental Technolo and Bomin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bomin Electronics 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 Bomin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bomin Electronics has no effect on the direction of Sinocat Environmental i.e., Sinocat Environmental and Bomin Electronics go up and down completely randomly.
Pair Corralation between Sinocat Environmental and Bomin Electronics
Assuming the 90 days trading horizon Sinocat Environmental Technology is expected to generate 2.5 times more return on investment than Bomin Electronics. However, Sinocat Environmental is 2.5 times more volatile than Bomin Electronics Co. It trades about 0.07 of its potential returns per unit of risk. Bomin Electronics Co is currently generating about 0.07 per unit of risk. If you would invest 1,729 in Sinocat Environmental Technology on September 27, 2024 and sell it today you would earn a total of 79.00 from holding Sinocat Environmental Technology or generate 4.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinocat Environmental Technolo vs. Bomin Electronics Co
Performance |
| Timeline |
| Sinocat Environmental |
| Bomin Electronics |
Sinocat Environmental and Bomin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinocat Environmental and Bomin Electronics
The main advantage of trading using opposite Sinocat Environmental and Bomin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinocat Environmental position performs unexpectedly, Bomin Electronics 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 Bomin Electronics will offset losses from the drop in Bomin Electronics' long position.| Sinocat Environmental vs. China Life Insurance | Sinocat Environmental vs. Cinda Securities Co | Sinocat Environmental vs. Piotech Inc A | Sinocat Environmental vs. Dongxing Sec 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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