Correlation Between Sino Horizon and Run Long

Can any of the company-specific risk be diversified away by investing in both Sino Horizon and Run Long 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 Sino Horizon and Run Long into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sino Horizon Holdings and Run Long Construction, you can compare the effects of market volatilities on Sino Horizon and Run Long 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 Sino Horizon with a short position of Run Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Horizon and Run Long.

Diversification Opportunities for Sino Horizon and Run Long

0.84

Correlation Coefficient

Sino Horizon  Run Long

Very poor diversification

The 3 months correlation between Sino and Run is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sino Horizon Holdings and Run Long Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Run Long Construction and Sino Horizon 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 Sino Horizon Holdings are associated (or correlated) with Run Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Run Long Construction has no effect on the direction of Sino Horizon i.e., Sino Horizon and Run Long go up and down completely randomly.

Pair Corralation between Sino Horizon and Run Long

Assuming the 90 days trading horizon Sino Horizon Holdings is expected to under-perform the Run Long. In addition to that, Sino Horizon is 2.52 times more volatile than Run Long Construction. It trades about -0.14 of its total potential returns per unit of risk. Run Long Construction is currently generating about -0.35 per unit of volatility. If you would invest  5,330  in Run Long Construction on September 29, 2024 and sell it today you would lose (1,550) from holding Run Long Construction or give up 29.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sino Horizon Holdings  vs.  Run Long Construction

Sino Horizon Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sino Horizon Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Run Long Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Run Long Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sino Horizon and Run Long

The main advantage of trading using opposite Sino Horizon and Run Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino Horizon position performs unexpectedly, Run Long 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 Run Long will offset losses from the drop in Run Long's long position.

The idea behind Sino Horizon Holdings and Run Long Construction 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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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.