Correlation Between Hygon Information and SGSG Sciencetechnolog

Can any of the company-specific risk be diversified away by investing in both Hygon Information and SGSG Sciencetechnolog 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 Hygon Information and SGSG Sciencetechnolog into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hygon Information Technology and SGSG Sciencetechnology Co, you can compare the effects of market volatilities on Hygon Information and SGSG Sciencetechnolog 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 Hygon Information with a short position of SGSG Sciencetechnolog. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hygon Information and SGSG Sciencetechnolog.

Diversification Opportunities for Hygon Information and SGSG Sciencetechnolog

-0.16

Correlation Coefficient

Hygon Information  SGSG Sciencetechnolog

Good diversification

The 3 months correlation between Hygon and SGSG is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hygon Information Technology and SGSG Sciencetechnology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGSG Sciencetechnology and Hygon Information 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 Hygon Information Technology are associated (or correlated) with SGSG Sciencetechnolog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGSG Sciencetechnology has no effect on the direction of Hygon Information i.e., Hygon Information and SGSG Sciencetechnolog go up and down completely randomly.

Pair Corralation between Hygon Information and SGSG Sciencetechnolog

Assuming the 90 days trading horizon Hygon Information Technology is expected to generate 0.7 times more return on investment than SGSG Sciencetechnolog. However, Hygon Information Technology is 1.43 times less risky than SGSG Sciencetechnolog. It trades about 0.05 of its potential returns per unit of risk. SGSG Sciencetechnology Co is currently generating about -0.03 per unit of risk. If you would invest  13,670  in Hygon Information Technology on December 22, 2024 and sell it today you would earn a total of  910.00  from holding Hygon Information Technology or generate 6.66% return on investment over 90 days.

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

Hygon Information Technology  vs.  SGSG Sciencetechnology Co

Hygon Information

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hygon Information Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hygon Information may actually be approaching a critical reversion point that can send shares even higher in April 2025.

SGSG Sciencetechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days SGSG Sciencetechnology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hygon Information and SGSG Sciencetechnolog

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

The idea behind Hygon Information Technology and SGSG Sciencetechnology Co 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 Transaction History module to view history of all your transactions and understand their impact on performance.