Correlation Between Senao International and Zinwell

Can any of the company-specific risk be diversified away by investing in both Senao International and Zinwell 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 Zinwell 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 Zinwell, you can compare the effects of market volatilities on Senao International and Zinwell 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 Zinwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao International and Zinwell.

Diversification Opportunities for Senao International and Zinwell

-0.08

Correlation Coefficient

Senao International  Zinwell

Good diversification

The 3 months correlation between Senao and Zinwell is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Senao International Co and Zinwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinwell 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 Zinwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinwell has no effect on the direction of Senao International i.e., Senao International and Zinwell go up and down completely randomly.

Pair Corralation between Senao International and Zinwell

Assuming the 90 days trading horizon Senao International Co is expected to generate 0.29 times more return on investment than Zinwell. However, Senao International Co is 3.49 times less risky than Zinwell. It trades about 0.12 of its potential returns per unit of risk. Zinwell is currently generating about -0.03 per unit of risk. If you would invest  3,280  in Senao International Co on December 28, 2024 and sell it today you would earn a total of  130.00  from holding Senao International Co or generate 3.96% return on investment over 90 days.

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

Senao International Co  vs.  Zinwell

Senao International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Senao International Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Senao International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Zinwell

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zinwell has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Zinwell 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 Senao International and Zinwell

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

The idea behind Senao International Co and Zinwell 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.