Correlation Between SICC and Guangdong Jinma

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

By analyzing existing cross correlation between SICC Co and Guangdong Jinma Entertainment, you can compare the effects of market volatilities on SICC and Guangdong Jinma 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 SICC with a short position of Guangdong Jinma. Check out your portfolio center. Please also check ongoing floating volatility patterns of SICC and Guangdong Jinma.

Diversification Opportunities for SICC and Guangdong Jinma

0.0

Correlation Coefficient

SICC  Guangdong Jinma

Pay attention - limited upside

The 3 months correlation between SICC and Guangdong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SICC Co and Guangdong Jinma Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Jinma Ente and SICC 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 SICC Co are associated (or correlated) with Guangdong Jinma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Jinma Ente has no effect on the direction of SICC i.e., SICC and Guangdong Jinma go up and down completely randomly.

Pair Corralation between SICC and Guangdong Jinma

If you would invest  1,519  in Guangdong Jinma Entertainment on October 4, 2024 and sell it today you would lose (70.00) from holding Guangdong Jinma Entertainment or give up 4.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

SICC Co  vs.  Guangdong Jinma Entertainment

SICC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SICC Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SICC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guangdong Jinma Ente

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guangdong Jinma Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Guangdong Jinma is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SICC and Guangdong Jinma

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

The idea behind SICC Co and Guangdong Jinma Entertainment 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.