Correlation Between Tradegate and Sinopharm Group

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

By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Sinopharm Group Co, you can compare the effects of market volatilities on Tradegate and Sinopharm Group 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 Tradegate with a short position of Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Sinopharm Group.

Diversification Opportunities for Tradegate and Sinopharm Group

0.28

Correlation Coefficient

Tradegate  Sinopharm Group

Modest diversification

The 3 months correlation between Tradegate and Sinopharm is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Tradegate i.e., Tradegate and Sinopharm Group go up and down completely randomly.

Pair Corralation between Tradegate and Sinopharm Group

Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.34 times more return on investment than Sinopharm Group. However, Tradegate AG Wertpapierhandelsbank is 2.92 times less risky than Sinopharm Group. It trades about 0.0 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about -0.37 per unit of risk. If you would invest  8,850  in Tradegate AG Wertpapierhandelsbank on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Tradegate AG Wertpapierhandels  vs.  Sinopharm Group Co

Tradegate AG Wertpap

Risk-Adjusted Performance

10 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tradegate AG Wertpapierhandelsbank are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Tradegate may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Sinopharm Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sinopharm Group Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sinopharm Group is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tradegate and Sinopharm Group

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

The idea behind Tradegate AG Wertpapierhandelsbank and Sinopharm Group 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.