Correlation Between SANOK RUBBER and Liaoning Port

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

By analyzing existing cross correlation between SANOK RUBBER ZY and Liaoning Port CoLtd, you can compare the effects of market volatilities on SANOK RUBBER and Liaoning Port 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 SANOK RUBBER with a short position of Liaoning Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Liaoning Port.

Diversification Opportunities for SANOK RUBBER and Liaoning Port

-0.47

Correlation Coefficient

SANOK RUBBER  Liaoning Port

Very good diversification

The 3 months correlation between SANOK and Liaoning is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Liaoning Port CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Port CoLtd and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with Liaoning Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Port CoLtd has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Liaoning Port go up and down completely randomly.

Pair Corralation between SANOK RUBBER and Liaoning Port

Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.12 times more return on investment than Liaoning Port. However, SANOK RUBBER is 1.12 times more volatile than Liaoning Port CoLtd. It trades about 0.44 of its potential returns per unit of risk. Liaoning Port CoLtd is currently generating about -0.29 per unit of risk. If you would invest  440.00  in SANOK RUBBER ZY on October 8, 2024 and sell it today you would earn a total of  67.00  from holding SANOK RUBBER ZY or generate 15.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SANOK RUBBER ZY  vs.  Liaoning Port CoLtd

SANOK RUBBER ZY

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Liaoning Port CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liaoning Port CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SANOK RUBBER and Liaoning Port

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

The idea behind SANOK RUBBER ZY and Liaoning Port CoLtd 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.