Correlation Between Sinofibers Technology and Rising Nonferrous

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Can any of the company-specific risk be diversified away by investing in both Sinofibers Technology and Rising Nonferrous 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 Sinofibers Technology and Rising Nonferrous into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinofibers Technology Co and Rising Nonferrous Metals, you can compare the effects of market volatilities on Sinofibers Technology and Rising Nonferrous 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 Rising Nonferrous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinofibers Technology and Rising Nonferrous.

Diversification Opportunities for Sinofibers Technology and Rising Nonferrous

0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Sinofibers and Rising is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sinofibers Technology Co and Rising Nonferrous Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rising Nonferrous Metals 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 Rising Nonferrous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rising Nonferrous Metals has no effect on the direction of Sinofibers Technology i.e., Sinofibers Technology and Rising Nonferrous go up and down completely randomly.

Pair Corralation between Sinofibers Technology and Rising Nonferrous

Assuming the 90 days trading horizon Sinofibers Technology Co is expected to under-perform the Rising Nonferrous. In addition to that, Sinofibers Technology is 1.28 times more volatile than Rising Nonferrous Metals. It trades about -0.03 of its total potential returns per unit of risk. Rising Nonferrous Metals is currently generating about -0.03 per unit of volatility. If you would invest  4,192  in Rising Nonferrous Metals on October 3, 2024 and sell it today you would lose (1,411) from holding Rising Nonferrous Metals or give up 33.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Sinofibers Technology Co  vs.  Rising Nonferrous Metals

 Performance 
       Timeline  
Sinofibers Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sinofibers Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Rising Nonferrous Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Rising Nonferrous Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sinofibers Technology and Rising Nonferrous Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sinofibers Technology and Rising Nonferrous

The main advantage of trading using opposite Sinofibers Technology and Rising Nonferrous positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinofibers Technology position performs unexpectedly, Rising Nonferrous 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 Rising Nonferrous will offset losses from the drop in Rising Nonferrous' long position.
The idea behind Sinofibers Technology Co and Rising Nonferrous Metals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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