Correlation Between CHINA DEVELOPMENT and Sysgration

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

By analyzing existing cross correlation between CHINA DEVELOPMENT FINANCIAL and Sysgration, you can compare the effects of market volatilities on CHINA DEVELOPMENT and Sysgration 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 CHINA DEVELOPMENT with a short position of Sysgration. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA DEVELOPMENT and Sysgration.

Diversification Opportunities for CHINA DEVELOPMENT and Sysgration

0.57

Correlation Coefficient

CHINA DEVELOPMENT  Sysgration

Very weak diversification

The 3 months correlation between CHINA and Sysgration is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CHINA DEVELOPMENT FINANCIAL and Sysgration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysgration and CHINA DEVELOPMENT 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 CHINA DEVELOPMENT FINANCIAL are associated (or correlated) with Sysgration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysgration has no effect on the direction of CHINA DEVELOPMENT i.e., CHINA DEVELOPMENT and Sysgration go up and down completely randomly.

Pair Corralation between CHINA DEVELOPMENT and Sysgration

Assuming the 90 days trading horizon CHINA DEVELOPMENT is expected to generate 3.48 times less return on investment than Sysgration. But when comparing it to its historical volatility, CHINA DEVELOPMENT FINANCIAL is 14.11 times less risky than Sysgration. It trades about 0.21 of its potential returns per unit of risk. Sysgration is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  4,055  in Sysgration on December 24, 2024 and sell it today you would earn a total of  215.00  from holding Sysgration or generate 5.3% return on investment over 90 days.

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

CHINA DEVELOPMENT FINANCIAL  vs.  Sysgration

CHINA DEVELOPMENT

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CHINA DEVELOPMENT FINANCIAL are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, CHINA DEVELOPMENT is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Sysgration

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sysgration are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sysgration may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with CHINA DEVELOPMENT and Sysgration

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

The idea behind CHINA DEVELOPMENT FINANCIAL and Sysgration 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.