Correlation Between Capital Futures and Sinher Technology

Can any of the company-specific risk be diversified away by investing in both Capital Futures and Sinher 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 Capital Futures and Sinher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Capital Futures Corp and Sinher Technology, you can compare the effects of market volatilities on Capital Futures and Sinher 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 Capital Futures with a short position of Sinher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Futures and Sinher Technology.

Diversification Opportunities for Capital Futures and Sinher Technology

-0.28

Correlation Coefficient

Capital Futures  Sinher Technology

Very good diversification

The 3 months correlation between Capital and Sinher is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Capital Futures Corp and Sinher Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinher Technology and Capital Futures 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 Capital Futures Corp are associated (or correlated) with Sinher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinher Technology has no effect on the direction of Capital Futures i.e., Capital Futures and Sinher Technology go up and down completely randomly.

Pair Corralation between Capital Futures and Sinher Technology

Assuming the 90 days trading horizon Capital Futures Corp is expected to generate 1.29 times more return on investment than Sinher Technology. However, Capital Futures is 1.29 times more volatile than Sinher Technology. It trades about 0.09 of its potential returns per unit of risk. Sinher Technology is currently generating about -0.02 per unit of risk. If you would invest  3,665  in Capital Futures Corp on September 19, 2024 and sell it today you would earn a total of  2,095  from holding Capital Futures Corp or generate 57.16% return on investment over 90 days.

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

Capital Futures Corp  vs.  Sinher Technology

Capital Futures Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Futures Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Capital Futures is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sinher Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinher Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sinher Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Capital Futures and Sinher Technology

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

The idea behind Capital Futures Corp and Sinher Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.