Correlation Between SGSG Sciencetechnolog and Beijing Baolande

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SGSG Sciencetechnolog and Beijing Baolande 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 SGSG Sciencetechnolog and Beijing Baolande into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SGSG Sciencetechnology Co and Beijing Baolande Software, you can compare the effects of market volatilities on SGSG Sciencetechnolog and Beijing Baolande 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 SGSG Sciencetechnolog with a short position of Beijing Baolande. Check out your portfolio center. Please also check ongoing floating volatility patterns of SGSG Sciencetechnolog and Beijing Baolande.

Diversification Opportunities for SGSG Sciencetechnolog and Beijing Baolande

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between SGSG and Beijing is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SGSG Sciencetechnology Co and Beijing Baolande Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Baolande Software and SGSG Sciencetechnolog 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 SGSG Sciencetechnology Co are associated (or correlated) with Beijing Baolande. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Baolande Software has no effect on the direction of SGSG Sciencetechnolog i.e., SGSG Sciencetechnolog and Beijing Baolande go up and down completely randomly.

Pair Corralation between SGSG Sciencetechnolog and Beijing Baolande

Assuming the 90 days trading horizon SGSG Sciencetechnology Co is expected to generate 2.1 times more return on investment than Beijing Baolande. However, SGSG Sciencetechnolog is 2.1 times more volatile than Beijing Baolande Software. It trades about 0.27 of its potential returns per unit of risk. Beijing Baolande Software is currently generating about -0.18 per unit of risk. If you would invest  2,422  in SGSG Sciencetechnology Co on October 6, 2024 and sell it today you would earn a total of  3,417  from holding SGSG Sciencetechnology Co or generate 141.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

SGSG Sciencetechnology Co  vs.  Beijing Baolande Software

 Performance 
       Timeline  
SGSG Sciencetechnology 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SGSG Sciencetechnology Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SGSG Sciencetechnolog sustained solid returns over the last few months and may actually be approaching a breakup point.
Beijing Baolande Software 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Beijing Baolande Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Beijing Baolande is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SGSG Sciencetechnolog and Beijing Baolande Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SGSG Sciencetechnolog and Beijing Baolande

The main advantage of trading using opposite SGSG Sciencetechnolog and Beijing Baolande positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SGSG Sciencetechnolog position performs unexpectedly, Beijing Baolande 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 Beijing Baolande will offset losses from the drop in Beijing Baolande's long position.
The idea behind SGSG Sciencetechnology Co and Beijing Baolande Software 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities