Correlation Between Blue Sail and Sany Heavy

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

By analyzing existing cross correlation between Blue Sail Medical and Sany Heavy Energy, you can compare the effects of market volatilities on Blue Sail and Sany Heavy 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 Blue Sail with a short position of Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Sail and Sany Heavy.

Diversification Opportunities for Blue Sail and Sany Heavy

0.89

Correlation Coefficient

Blue Sail  Sany Heavy

Very poor diversification

The 3 months correlation between Blue and Sany is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Blue Sail Medical and Sany Heavy Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Energy and Blue Sail 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 Blue Sail Medical are associated (or correlated) with Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Energy has no effect on the direction of Blue Sail i.e., Blue Sail and Sany Heavy go up and down completely randomly.

Pair Corralation between Blue Sail and Sany Heavy

Assuming the 90 days trading horizon Blue Sail is expected to generate 1.2 times less return on investment than Sany Heavy. But when comparing it to its historical volatility, Blue Sail Medical is 1.38 times less risky than Sany Heavy. It trades about 0.08 of its potential returns per unit of risk. Sany Heavy Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,570  in Sany Heavy Energy on September 30, 2024 and sell it today you would earn a total of  574.00  from holding Sany Heavy Energy or generate 22.33% return on investment over 90 days.

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

Blue Sail Medical  vs.  Sany Heavy Energy

Blue Sail Medical

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sany Heavy Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sany Heavy Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sany Heavy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Blue Sail and Sany Heavy

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

The idea behind Blue Sail Medical and Sany Heavy Energy 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.