Correlation Between China Sports and Sinomach Automobile
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By analyzing existing cross correlation between China Sports Industry and Sinomach Automobile Co, you can compare the effects of market volatilities on China Sports and Sinomach Automobile 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 China Sports with a short position of Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Sports and Sinomach Automobile.
Diversification Opportunities for China Sports and Sinomach Automobile
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Sinomach is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Sports Industry and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile and China Sports 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 China Sports Industry are associated (or correlated) with Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of China Sports i.e., China Sports and Sinomach Automobile go up and down completely randomly.
Pair Corralation between China Sports and Sinomach Automobile
Assuming the 90 days trading horizon China Sports Industry is expected to generate 0.96 times more return on investment than Sinomach Automobile. However, China Sports Industry is 1.04 times less risky than Sinomach Automobile. It trades about 0.07 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about 0.05 per unit of risk. If you would invest 759.00 in China Sports Industry on September 27, 2024 and sell it today you would earn a total of 83.00 from holding China Sports Industry or generate 10.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
China Sports Industry vs. Sinomach Automobile Co
Performance |
Timeline |
China Sports Industry |
Sinomach Automobile |
China Sports and Sinomach Automobile Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Sports and Sinomach Automobile
The main advantage of trading using opposite China Sports and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Sports position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.China Sports vs. PetroChina Co Ltd | China Sports vs. China Mobile Limited | China Sports vs. CNOOC Limited | China Sports vs. Ping An Insurance |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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