Correlation Between Sino Medical and SIASUN Robot

Can any of the company-specific risk be diversified away by investing in both Sino Medical and SIASUN Robot 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 Sino Medical and SIASUN Robot into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sino Medical Sciences and SIASUN Robot Automation, you can compare the effects of market volatilities on Sino Medical and SIASUN Robot 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 Sino Medical with a short position of SIASUN Robot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino Medical and SIASUN Robot.

Diversification Opportunities for Sino Medical and SIASUN Robot

0.37

Correlation Coefficient

Sino Medical  SIASUN Robot

Weak diversification

The 3 months correlation between Sino and SIASUN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sino Medical Sciences and SIASUN Robot Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIASUN Robot Automation and Sino Medical 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 Sino Medical Sciences are associated (or correlated) with SIASUN Robot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIASUN Robot Automation has no effect on the direction of Sino Medical i.e., Sino Medical and SIASUN Robot go up and down completely randomly.

Pair Corralation between Sino Medical and SIASUN Robot

Assuming the 90 days trading horizon Sino Medical Sciences is expected to under-perform the SIASUN Robot. But the stock apears to be less risky and, when comparing its historical volatility, Sino Medical Sciences is 1.73 times less risky than SIASUN Robot. The stock trades about -0.04 of its potential returns per unit of risk. The SIASUN Robot Automation is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,334  in SIASUN Robot Automation on October 23, 2024 and sell it today you would earn a total of  573.00  from holding SIASUN Robot Automation or generate 42.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sino Medical Sciences  vs.  SIASUN Robot Automation

Sino Medical Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sino Medical Sciences 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.

SIASUN Robot Automation

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SIASUN Robot Automation are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SIASUN Robot sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sino Medical and SIASUN Robot

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

The idea behind Sino Medical Sciences and SIASUN Robot Automation 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.