Correlation Between Senao International and Gigastorage Corp
Can any of the company-specific risk be diversified away by investing in both Senao International and Gigastorage Corp 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 Senao International and Gigastorage Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao International Co and Gigastorage Corp, you can compare the effects of market volatilities on Senao International and Gigastorage Corp 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 Senao International with a short position of Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao International and Gigastorage Corp.
Diversification Opportunities for Senao International and Gigastorage Corp
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Senao and Gigastorage is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Senao International Co and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp and Senao International 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 Senao International Co are associated (or correlated) with Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Senao International i.e., Senao International and Gigastorage Corp go up and down completely randomly.
Pair Corralation between Senao International and Gigastorage Corp
Assuming the 90 days trading horizon Senao International Co is expected to generate 0.42 times more return on investment than Gigastorage Corp. However, Senao International Co is 2.41 times less risky than Gigastorage Corp. It trades about -0.15 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.25 per unit of risk. If you would invest 3,500 in Senao International Co on October 21, 2024 and sell it today you would lose (265.00) from holding Senao International Co or give up 7.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Senao International Co vs. Gigastorage Corp
Performance |
Timeline |
Senao International |
Gigastorage Corp |
Senao International and Gigastorage Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senao International and Gigastorage Corp
The main advantage of trading using opposite Senao International and Gigastorage Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao International position performs unexpectedly, Gigastorage Corp 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 Gigastorage Corp will offset losses from the drop in Gigastorage Corp's long position.Senao International vs. Acelon Chemicals Fiber | Senao International vs. Vate Technology Co | Senao International vs. Golden Biotechnology | Senao International vs. Formosa Chemicals Fibre |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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