Correlation Between Saurer Intelligent and HUAQIN TECHNOLOGY

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

By analyzing existing cross correlation between Saurer Intelligent Technology and HUAQIN TECHNOLOGY LTD, you can compare the effects of market volatilities on Saurer Intelligent and HUAQIN 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 Saurer Intelligent with a short position of HUAQIN TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saurer Intelligent and HUAQIN TECHNOLOGY.

Diversification Opportunities for Saurer Intelligent and HUAQIN TECHNOLOGY

0.47

Correlation Coefficient

Saurer Intelligent  HUAQIN TECHNOLOGY

Very weak diversification

The 3 months correlation between Saurer and HUAQIN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Saurer Intelligent Technology and HUAQIN TECHNOLOGY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUAQIN TECHNOLOGY LTD and Saurer Intelligent 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 Saurer Intelligent Technology are associated (or correlated) with HUAQIN TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUAQIN TECHNOLOGY LTD has no effect on the direction of Saurer Intelligent i.e., Saurer Intelligent and HUAQIN TECHNOLOGY go up and down completely randomly.

Pair Corralation between Saurer Intelligent and HUAQIN TECHNOLOGY

Assuming the 90 days trading horizon Saurer Intelligent is expected to generate 6.26 times less return on investment than HUAQIN TECHNOLOGY. In addition to that, Saurer Intelligent is 1.4 times more volatile than HUAQIN TECHNOLOGY LTD. It trades about 0.01 of its total potential returns per unit of risk. HUAQIN TECHNOLOGY LTD is currently generating about 0.06 per unit of volatility. If you would invest  4,989  in HUAQIN TECHNOLOGY LTD on October 7, 2024 and sell it today you would earn a total of  1,749  from holding HUAQIN TECHNOLOGY LTD or generate 35.06% return on investment over 90 days.

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

Saurer Intelligent Technology  vs.  HUAQIN TECHNOLOGY LTD

Saurer Intelligent

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Saurer Intelligent Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Saurer Intelligent sustained solid returns over the last few months and may actually be approaching a breakup point.

HUAQIN TECHNOLOGY LTD

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HUAQIN TECHNOLOGY LTD are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, HUAQIN TECHNOLOGY sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Saurer Intelligent and HUAQIN TECHNOLOGY

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

The idea behind Saurer Intelligent Technology and HUAQIN TECHNOLOGY LTD 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.