Correlation Between Changchun and SICC

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

By analyzing existing cross correlation between Changchun UP Optotech and SICC Co, you can compare the effects of market volatilities on Changchun and SICC 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 Changchun with a short position of SICC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and SICC.

Diversification Opportunities for Changchun and SICC

0.0

Correlation Coefficient

Changchun  SICC

Pay attention - limited upside

The 3 months correlation between Changchun and SICC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and SICC Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SICC and Changchun 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 Changchun UP Optotech are associated (or correlated) with SICC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SICC has no effect on the direction of Changchun i.e., Changchun and SICC go up and down completely randomly.

Pair Corralation between Changchun and SICC

If you would invest  3,650  in Changchun UP Optotech on October 22, 2024 and sell it today you would earn a total of  284.00  from holding Changchun UP Optotech or generate 7.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Changchun UP Optotech  vs.  SICC Co

Changchun UP Optotech

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Changchun UP Optotech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Changchun may actually be approaching a critical reversion point that can send shares even higher in February 2025.

SICC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SICC Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SICC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Changchun and SICC

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

The idea behind Changchun UP Optotech and SICC Co 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.