Correlation Between ALERION CLEANPOWER and SINOPEC OILFIELD-H-
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER and SINOPEC OILFIELD-H- 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 ALERION CLEANPOWER and SINOPEC OILFIELD-H- into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and SINOPEC OILFIELD H , you can compare the effects of market volatilities on ALERION CLEANPOWER and SINOPEC OILFIELD-H- 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 ALERION CLEANPOWER with a short position of SINOPEC OILFIELD-H-. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and SINOPEC OILFIELD-H-.
Diversification Opportunities for ALERION CLEANPOWER and SINOPEC OILFIELD-H-
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ALERION and SINOPEC is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and SINOPEC OILFIELD H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SINOPEC OILFIELD-H- and ALERION CLEANPOWER 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 ALERION CLEANPOWER are associated (or correlated) with SINOPEC OILFIELD-H-. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SINOPEC OILFIELD-H- has no effect on the direction of ALERION CLEANPOWER i.e., ALERION CLEANPOWER and SINOPEC OILFIELD-H- go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and SINOPEC OILFIELD-H-
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to generate 0.8 times more return on investment than SINOPEC OILFIELD-H-. However, ALERION CLEANPOWER is 1.24 times less risky than SINOPEC OILFIELD-H-. It trades about 0.14 of its potential returns per unit of risk. SINOPEC OILFIELD H is currently generating about -0.06 per unit of risk. If you would invest 1,538 in ALERION CLEANPOWER on August 31, 2024 and sell it today you would earn a total of 144.00 from holding ALERION CLEANPOWER or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. SINOPEC OILFIELD H
Performance |
| Timeline |
| ALERION CLEANPOWER |
| SINOPEC OILFIELD-H- |
ALERION CLEANPOWER and SINOPEC OILFIELD-H- Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and SINOPEC OILFIELD-H-
The main advantage of trading using opposite ALERION CLEANPOWER and SINOPEC OILFIELD-H- positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER position performs unexpectedly, SINOPEC OILFIELD-H- 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 SINOPEC OILFIELD-H- will offset losses from the drop in SINOPEC OILFIELD-H-'s long position.| ALERION CLEANPOWER vs. MagnaChip Semiconductor Corp | ALERION CLEANPOWER vs. Ultra Clean Holdings | ALERION CLEANPOWER vs. CPU SOFTWAREHOUSE | ALERION CLEANPOWER vs. TOREX SEMICONDUCTOR LTD |
| SINOPEC OILFIELD-H- vs. ELECTRONIC ARTS | SINOPEC OILFIELD-H- vs. Nucletron Electronic Aktiengesellschaft | SINOPEC OILFIELD-H- vs. ALERION CLEANPOWER | SINOPEC OILFIELD-H- vs. Samsung Electronics 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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