Correlation Between Sinomach Automobile and Dawning Information
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By analyzing existing cross correlation between Sinomach Automobile Co and Dawning Information Industry, you can compare the effects of market volatilities on Sinomach Automobile and Dawning Information 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 Sinomach Automobile with a short position of Dawning Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Dawning Information.
Diversification Opportunities for Sinomach Automobile and Dawning Information
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinomach and Dawning is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Dawning Information Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawning Information and Sinomach Automobile 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 Sinomach Automobile Co are associated (or correlated) with Dawning Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawning Information has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Dawning Information go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Dawning Information
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to under-perform the Dawning Information. But the stock apears to be less risky and, when comparing its historical volatility, Sinomach Automobile Co is 1.11 times less risky than Dawning Information. The stock trades about -0.02 of its potential returns per unit of risk. The Dawning Information Industry is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,112 in Dawning Information Industry on September 9, 2024 and sell it today you would earn a total of 1,587 from holding Dawning Information Industry or generate 25.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sinomach Automobile Co vs. Dawning Information Industry
Performance |
Timeline |
Sinomach Automobile |
Dawning Information |
Sinomach Automobile and Dawning Information Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinomach Automobile and Dawning Information
The main advantage of trading using opposite Sinomach Automobile and Dawning Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Dawning Information 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 Dawning Information will offset losses from the drop in Dawning Information's long position.Sinomach Automobile vs. DO Home Collection | Sinomach Automobile vs. Allgens Medical Technology | Sinomach Automobile vs. Zhongshan Public Utilities | Sinomach Automobile vs. Qumei Furniture Group |
Dawning Information vs. Biwin Storage Technology | Dawning Information vs. PetroChina Co Ltd | Dawning Information vs. Industrial and Commercial | Dawning Information vs. China Construction Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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