Correlation Between Long Bon and Sino Horizon
Can any of the company-specific risk be diversified away by investing in both Long Bon and Sino Horizon 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 Long Bon and Sino Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Long Bon International and Sino Horizon Holdings, you can compare the effects of market volatilities on Long Bon and Sino Horizon 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 Long Bon with a short position of Sino Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Bon and Sino Horizon.
Diversification Opportunities for Long Bon and Sino Horizon
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Long and Sino is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Long Bon International and Sino Horizon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Horizon Holdings and Long Bon 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 Long Bon International are associated (or correlated) with Sino Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Horizon Holdings has no effect on the direction of Long Bon i.e., Long Bon and Sino Horizon go up and down completely randomly.
Pair Corralation between Long Bon and Sino Horizon
Assuming the 90 days trading horizon Long Bon International is expected to generate 0.32 times more return on investment than Sino Horizon. However, Long Bon International is 3.11 times less risky than Sino Horizon. It trades about 0.0 of its potential returns per unit of risk. Sino Horizon Holdings is currently generating about -0.1 per unit of risk. If you would invest 1,995 in Long Bon International on September 24, 2024 and sell it today you would lose (10.00) from holding Long Bon International or give up 0.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Long Bon International vs. Sino Horizon Holdings
Performance |
Timeline |
Long Bon International |
Sino Horizon Holdings |
Long Bon and Sino Horizon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Long Bon and Sino Horizon
The main advantage of trading using opposite Long Bon and Sino Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Bon position performs unexpectedly, Sino Horizon 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 Sino Horizon will offset losses from the drop in Sino Horizon's long position.Long Bon vs. Hung Sheng Construction | Long Bon vs. Chainqui Construction Development | Long Bon vs. BES Engineering Co | Long Bon vs. Sincere Navigation Corp |
Sino Horizon vs. Hung Sheng Construction | Sino Horizon vs. Chainqui Construction Development | Sino Horizon vs. BES Engineering Co | Sino Horizon vs. Long Bon International |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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