Correlation Between Sieyuan Electric and Anhui Jiuhuashan

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

Diversification Opportunities for Sieyuan Electric and Anhui Jiuhuashan

-0.71
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Sieyuan and Anhui is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sieyuan Electric Co and Anhui Jiuhuashan Tourism in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jiuhuashan Tourism and Sieyuan Electric 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 Sieyuan Electric Co are associated (or correlated) with Anhui Jiuhuashan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jiuhuashan Tourism has no effect on the direction of Sieyuan Electric i.e., Sieyuan Electric and Anhui Jiuhuashan go up and down completely randomly.

Pair Corralation between Sieyuan Electric and Anhui Jiuhuashan

Assuming the 90 days trading horizon Sieyuan Electric Co is expected to generate 2.23 times more return on investment than Anhui Jiuhuashan. However, Sieyuan Electric is 2.23 times more volatile than Anhui Jiuhuashan Tourism. It trades about 0.3 of its potential returns per unit of risk. Anhui Jiuhuashan Tourism is currently generating about -0.1 per unit of risk. If you would invest  9,300  in Sieyuan Electric Co on September 11, 2025 and sell it today you would earn a total of  6,376  from holding Sieyuan Electric Co or generate 68.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy98.31%
ValuesDaily Returns

Sieyuan Electric Co  vs.  Anhui Jiuhuashan Tourism

 Performance 
       Timeline  
Sieyuan Electric 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sieyuan Electric Co are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sieyuan Electric sustained solid returns over the last few months and may actually be approaching a breakup point.
Anhui Jiuhuashan Tourism 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Anhui Jiuhuashan Tourism has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sieyuan Electric and Anhui Jiuhuashan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sieyuan Electric and Anhui Jiuhuashan

The main advantage of trading using opposite Sieyuan Electric and Anhui Jiuhuashan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sieyuan Electric position performs unexpectedly, Anhui Jiuhuashan 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 Anhui Jiuhuashan will offset losses from the drop in Anhui Jiuhuashan's long position.
The idea behind Sieyuan Electric Co and Anhui Jiuhuashan Tourism 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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