Correlation Between San Neng and Group Up

Can any of the company-specific risk be diversified away by investing in both San Neng and Group Up 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 San Neng and Group Up into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between San Neng Group and Group Up Industrial, you can compare the effects of market volatilities on San Neng and Group Up 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 San Neng with a short position of Group Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Neng and Group Up.

Diversification Opportunities for San Neng and Group Up

0.73

Correlation Coefficient

San Neng  Group Up

Poor diversification

The 3 months correlation between San and Group is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding San Neng Group and Group Up Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Up Industrial and San Neng 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 San Neng Group are associated (or correlated) with Group Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Up Industrial has no effect on the direction of San Neng i.e., San Neng and Group Up go up and down completely randomly.

Pair Corralation between San Neng and Group Up

Assuming the 90 days trading horizon San Neng Group is expected to generate 0.23 times more return on investment than Group Up. However, San Neng Group is 4.32 times less risky than Group Up. It trades about -0.01 of its potential returns per unit of risk. Group Up Industrial is currently generating about -0.1 per unit of risk. If you would invest  4,200  in San Neng Group on September 18, 2024 and sell it today you would lose (20.00) from holding San Neng Group or give up 0.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

San Neng Group  vs.  Group Up Industrial

San Neng Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Group Up Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Group Up Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with San Neng and Group Up

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

The idea behind San Neng Group and Group Up Industrial 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.