Correlation Between CARGOJET INC and Sinopharm Group
Can any of the company-specific risk be diversified away by investing in both CARGOJET INC and Sinopharm Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CARGOJET INC and Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARGOJET INC VAR and Sinopharm Group Co, you can compare the effects of market volatilities on CARGOJET INC and Sinopharm Group 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 CARGOJET INC with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARGOJET INC and Sinopharm Group.
Diversification Opportunities for CARGOJET INC and Sinopharm Group
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CARGOJET and Sinopharm is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding CARGOJET INC VAR and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and CARGOJET INC 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 CARGOJET INC VAR are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of CARGOJET INC i.e., CARGOJET INC and Sinopharm Group go up and down completely randomly.
Pair Corralation between CARGOJET INC and Sinopharm Group
Assuming the 90 days trading horizon CARGOJET INC VAR is expected to generate 1.76 times more return on investment than Sinopharm Group. However, CARGOJET INC is 1.76 times more volatile than Sinopharm Group Co. It trades about 0.28 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about -0.06 per unit of risk. If you would invest 7,350 in CARGOJET INC VAR on November 2, 2024 and sell it today you would earn a total of 850.00 from holding CARGOJET INC VAR or generate 11.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARGOJET INC VAR vs. Sinopharm Group Co
Performance |
| Timeline |
| CARGOJET INC VAR |
| Sinopharm Group |
CARGOJET INC and Sinopharm Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARGOJET INC and Sinopharm Group
The main advantage of trading using opposite CARGOJET INC and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARGOJET INC position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group's long position.| CARGOJET INC vs. Apple Inc | CARGOJET INC vs. Apple Inc | CARGOJET INC vs. Apple Inc | CARGOJET INC vs. Apple Inc |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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