Correlation Between Senci Electric and China State
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By analyzing existing cross correlation between Senci Electric Machinery and China State Construction, you can compare the effects of market volatilities on Senci Electric and China State 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 Senci Electric with a short position of China State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senci Electric and China State.
Diversification Opportunities for Senci Electric and China State
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Senci and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Senci Electric Machinery and China State Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China State Construction and Senci Electric 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 Senci Electric Machinery are associated (or correlated) with China State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China State Construction has no effect on the direction of Senci Electric i.e., Senci Electric and China State go up and down completely randomly.
Pair Corralation between Senci Electric and China State
Assuming the 90 days trading horizon Senci Electric Machinery is expected to generate 1.01 times more return on investment than China State. However, Senci Electric is 1.01 times more volatile than China State Construction. It trades about 0.16 of its potential returns per unit of risk. China State Construction is currently generating about 0.14 per unit of risk. If you would invest 1,220 in Senci Electric Machinery on September 7, 2024 and sell it today you would earn a total of 344.00 from holding Senci Electric Machinery or generate 28.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Senci Electric Machinery vs. China State Construction
Performance |
Timeline |
Senci Electric Machinery |
China State Construction |
Senci Electric and China State Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Senci Electric and China State
The main advantage of trading using opposite Senci Electric and China State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senci Electric position performs unexpectedly, China State 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 China State will offset losses from the drop in China State's long position.Senci Electric vs. Kweichow Moutai Co | Senci Electric vs. Jiangsu Pacific Quartz | Senci Electric vs. Contemporary Amperex Technology | Senci Electric vs. Wuliangye Yibin Co |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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