Correlation Between Sinomine Resource and Eternal Asia

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

By analyzing existing cross correlation between Sinomine Resource Exploration and Eternal Asia Supply, you can compare the effects of market volatilities on Sinomine Resource and Eternal Asia 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 Sinomine Resource with a short position of Eternal Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomine Resource and Eternal Asia.

Diversification Opportunities for Sinomine Resource and Eternal Asia

0.0

Correlation Coefficient

Sinomine Resource  Eternal Asia

Pay attention - limited upside

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

Pair Corralation between Sinomine Resource and Eternal Asia

If you would invest  0.00  in Eternal Asia Supply on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Eternal Asia Supply or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

Sinomine Resource Exploration  vs.  Eternal Asia Supply

Sinomine Resource

Risk-Adjusted Performance

0 of 100

Very Weak

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

Eternal Asia Supply

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with Sinomine Resource and Eternal Asia

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

The idea behind Sinomine Resource Exploration and Eternal Asia Supply 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.