Correlation Between Jiangsu Phoenix and Sinomach General

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Can any of the company-specific risk be diversified away by investing in both Jiangsu Phoenix and Sinomach General 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 Jiangsu Phoenix and Sinomach General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangsu Phoenix Publishing and Sinomach General Machinery, you can compare the effects of market volatilities on Jiangsu Phoenix and Sinomach General 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 Jiangsu Phoenix with a short position of Sinomach General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Phoenix and Sinomach General.

Diversification Opportunities for Jiangsu Phoenix and Sinomach General

-0.32
  Correlation Coefficient

Very good diversification

The 3 months correlation between Jiangsu and Sinomach is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Phoenix Publishing and Sinomach General Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach General Mac and Jiangsu Phoenix 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 Jiangsu Phoenix Publishing are associated (or correlated) with Sinomach General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach General Mac has no effect on the direction of Jiangsu Phoenix i.e., Jiangsu Phoenix and Sinomach General go up and down completely randomly.

Pair Corralation between Jiangsu Phoenix and Sinomach General

Assuming the 90 days trading horizon Jiangsu Phoenix Publishing is expected to generate 0.89 times more return on investment than Sinomach General. However, Jiangsu Phoenix Publishing is 1.12 times less risky than Sinomach General. It trades about 0.05 of its potential returns per unit of risk. Sinomach General Machinery is currently generating about 0.03 per unit of risk. If you would invest  721.00  in Jiangsu Phoenix Publishing on October 4, 2024 and sell it today you would earn a total of  433.00  from holding Jiangsu Phoenix Publishing or generate 60.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jiangsu Phoenix Publishing  vs.  Sinomach General Machinery

 Performance 
       Timeline  
Jiangsu Phoenix Publ 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sinomach General Machinery are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Sinomach General is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jiangsu Phoenix and Sinomach General Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jiangsu Phoenix and Sinomach General

The main advantage of trading using opposite Jiangsu Phoenix and Sinomach General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Phoenix position performs unexpectedly, Sinomach General 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 Sinomach General will offset losses from the drop in Sinomach General's long position.
The idea behind Jiangsu Phoenix Publishing and Sinomach General Machinery 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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