Correlation Between Xiangyu Medical and Sany Heavy

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Can any of the company-specific risk be diversified away by investing in both Xiangyu Medical and Sany Heavy 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 Xiangyu Medical and Sany Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xiangyu Medical Co and Sany Heavy Energy, you can compare the effects of market volatilities on Xiangyu Medical and Sany Heavy 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 Xiangyu Medical with a short position of Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiangyu Medical and Sany Heavy.

Diversification Opportunities for Xiangyu Medical and Sany Heavy

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Xiangyu and Sany is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Xiangyu Medical Co and Sany Heavy Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Energy and Xiangyu 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 Xiangyu Medical Co are associated (or correlated) with Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Energy has no effect on the direction of Xiangyu Medical i.e., Xiangyu Medical and Sany Heavy go up and down completely randomly.

Pair Corralation between Xiangyu Medical and Sany Heavy

Assuming the 90 days trading horizon Xiangyu Medical is expected to generate 3.77 times less return on investment than Sany Heavy. In addition to that, Xiangyu Medical is 1.33 times more volatile than Sany Heavy Energy. It trades about 0.01 of its total potential returns per unit of risk. Sany Heavy Energy is currently generating about 0.07 per unit of volatility. If you would invest  2,570  in Sany Heavy Energy on September 30, 2024 and sell it today you would earn a total of  574.00  from holding Sany Heavy Energy or generate 22.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Xiangyu Medical Co  vs.  Sany Heavy Energy

 Performance 
       Timeline  
Xiangyu Medical 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Xiangyu Medical Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Xiangyu Medical may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Sany Heavy Energy 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Sany Heavy Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sany Heavy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xiangyu Medical and Sany Heavy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Xiangyu Medical and Sany Heavy

The main advantage of trading using opposite Xiangyu Medical and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiangyu Medical position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.
The idea behind Xiangyu Medical Co and Sany Heavy Energy 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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