Correlation Between United Renewable and Sino Horizon
Can any of the company-specific risk be diversified away by investing in both United Renewable and Sino Horizon 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 United Renewable and Sino Horizon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Renewable Energy and Sino Horizon Holdings, you can compare the effects of market volatilities on United Renewable and Sino Horizon 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 United Renewable with a short position of Sino Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Renewable and Sino Horizon.
Diversification Opportunities for United Renewable and Sino Horizon
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Sino is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding United Renewable Energy and Sino Horizon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Horizon Holdings and United Renewable 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 United Renewable Energy are associated (or correlated) with Sino Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Horizon Holdings has no effect on the direction of United Renewable i.e., United Renewable and Sino Horizon go up and down completely randomly.
Pair Corralation between United Renewable and Sino Horizon
Assuming the 90 days trading horizon United Renewable Energy is expected to generate 1.41 times more return on investment than Sino Horizon. However, United Renewable is 1.41 times more volatile than Sino Horizon Holdings. It trades about 0.13 of its potential returns per unit of risk. Sino Horizon Holdings is currently generating about -0.05 per unit of risk. If you would invest 1,130 in United Renewable Energy on January 26, 2024 and sell it today you would earn a total of 75.00 from holding United Renewable Energy or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Renewable Energy vs. Sino Horizon Holdings
Performance |
| Timeline |
| United Renewable Energy |
| Sino Horizon Holdings |
United Renewable and Sino Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Renewable and Sino Horizon
The main advantage of trading using opposite United Renewable and Sino Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Renewable position performs unexpectedly, Sino Horizon 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 Sino Horizon will offset losses from the drop in Sino Horizon's long position.| United Renewable vs. Motech Industries Co | United Renewable vs. Innolux Corp | United Renewable vs. Gigastorage Corp | United Renewable vs. Darwin Precisions Corp |
| Sino Horizon vs. Chainqui Construction Development | Sino Horizon vs. Kee Tai Properties | Sino Horizon vs. BES Engineering Co | Sino Horizon vs. Zinwell |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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