Correlation Between Sinofibers Technology and Advanced Technology
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By analyzing existing cross correlation between Sinofibers Technology Co and Advanced Technology Materials, you can compare the effects of market volatilities on Sinofibers Technology and Advanced Technology 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 Sinofibers Technology with a short position of Advanced Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Advanced Technology.
Diversification Opportunities for Sinofibers Technology and Advanced Technology
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sinofibers and Advanced is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Advanced Technology Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Technology and Sinofibers Technology 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 Sinofibers Technology Co are associated (or correlated) with Advanced Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Technology has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Advanced Technology go up and down completely randomly.
Pair Corralation between Sinofibers Technology and Advanced Technology
Assuming the 90 days trading horizon Sinofibers Technology Co is expected to under-perform the Advanced Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sinofibers Technology Co is 1.27 times less risky than Advanced Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Advanced Technology Materials is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,022 in Advanced Technology Materials on September 25, 2024 and sell it today you would earn a total of 108.00 from holding Advanced Technology Materials or generate 10.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Sinofibers Technology Co vs. Advanced Technology Materials
Performance |
Timeline |
Sinofibers Technology |
Advanced Technology |
Sinofibers Technology and Advanced Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinofibers Technology and Advanced Technology
The main advantage of trading using opposite Sinofibers Technology and Advanced Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Advanced Technology 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 Advanced Technology will offset losses from the drop in Advanced Technology's long position.Sinofibers Technology vs. Zijin Mining Group | Sinofibers Technology vs. Wanhua Chemical Group | Sinofibers Technology vs. Baoshan Iron Steel | Sinofibers Technology vs. Shandong Gold Mining |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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