Correlation Between Cayman Engley and Sanyang

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

By analyzing existing cross correlation between Cayman Engley Industrial and Sanyang Motor Co, you can compare the effects of market volatilities on Cayman Engley and Sanyang 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 Cayman Engley with a short position of Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cayman Engley and Sanyang.

Diversification Opportunities for Cayman Engley and Sanyang

0.46

Correlation Coefficient

Cayman Engley  Sanyang

Very weak diversification

The 3 months correlation between Cayman and Sanyang is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cayman Engley Industrial and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor and Cayman Engley 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 Cayman Engley Industrial are associated (or correlated) with Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of Cayman Engley i.e., Cayman Engley and Sanyang go up and down completely randomly.

Pair Corralation between Cayman Engley and Sanyang

Assuming the 90 days trading horizon Cayman Engley Industrial is expected to under-perform the Sanyang. In addition to that, Cayman Engley is 1.13 times more volatile than Sanyang Motor Co. It trades about -0.36 of its total potential returns per unit of risk. Sanyang Motor Co is currently generating about -0.03 per unit of volatility. If you would invest  7,000  in Sanyang Motor Co on October 12, 2024 and sell it today you would lose (200.00) from holding Sanyang Motor Co or give up 2.86% of portfolio value over 90 days.

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

Cayman Engley Industrial  vs.  Sanyang Motor Co

Cayman Engley Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cayman Engley Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sanyang Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanyang Motor Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sanyang is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Cayman Engley and Sanyang

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

The idea behind Cayman Engley Industrial and Sanyang Motor 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.