Correlation Between Strix Group and Sinopec Oilfield

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

By analyzing existing cross correlation between Strix Group Plc and Sinopec Oilfield Service, you can compare the effects of market volatilities on Strix Group and Sinopec Oilfield 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 Strix Group with a short position of Sinopec Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strix Group and Sinopec Oilfield.

Diversification Opportunities for Strix Group and Sinopec Oilfield

-0.26

Correlation Coefficient

Strix Group  Sinopec Oilfield

Very good diversification

The 3 months correlation between Strix and Sinopec is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Strix Group Plc and Sinopec Oilfield Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopec Oilfield Service and Strix Group 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 Strix Group Plc are associated (or correlated) with Sinopec Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopec Oilfield Service has no effect on the direction of Strix Group i.e., Strix Group and Sinopec Oilfield go up and down completely randomly.

Pair Corralation between Strix Group and Sinopec Oilfield

Assuming the 90 days horizon Strix Group is expected to generate 1.03 times less return on investment than Sinopec Oilfield. But when comparing it to its historical volatility, Strix Group Plc is 1.21 times less risky than Sinopec Oilfield. It trades about 0.01 of its potential returns per unit of risk. Sinopec Oilfield Service is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  7.05  in Sinopec Oilfield Service on December 29, 2024 and sell it today you would lose (0.05) from holding Sinopec Oilfield Service or give up 0.71% of portfolio value over 90 days.

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

Strix Group Plc  vs.  Sinopec Oilfield Service

Strix Group Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strix Group Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Strix Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sinopec Oilfield Service

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sinopec Oilfield Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sinopec Oilfield is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Strix Group and Sinopec Oilfield

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

The idea behind Strix Group Plc and Sinopec Oilfield Service 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.