Correlation Between Sichuan Tianwei and Suwen Electric

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

Diversification Opportunities for Sichuan Tianwei and Suwen Electric

0.26
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Sichuan Tianwei and Suwen Electric

Assuming the 90 days trading horizon Sichuan Tianwei is expected to generate 1.15 times less return on investment than Suwen Electric. But when comparing it to its historical volatility, Sichuan Tianwei Electronic is 1.21 times less risky than Suwen Electric. It trades about 0.08 of its potential returns per unit of risk. Suwen Electric Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,922  in Suwen Electric Energy on September 13, 2025 and sell it today you would earn a total of  182.00  from holding Suwen Electric Energy or generate 9.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Sichuan Tianwei Electronic  vs.  Suwen Electric Energy

 Performance 
       Timeline  
Sichuan Tianwei Elec 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Sichuan Tianwei Electronic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sichuan Tianwei may actually be approaching a critical reversion point that can send shares even higher in January 2026.
Suwen Electric Energy 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Suwen Electric Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suwen Electric may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Sichuan Tianwei and Suwen Electric Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sichuan Tianwei and Suwen Electric

The main advantage of trading using opposite Sichuan Tianwei and Suwen Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Tianwei position performs unexpectedly, Suwen Electric 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 Suwen Electric will offset losses from the drop in Suwen Electric's long position.
The idea behind Sichuan Tianwei Electronic and Suwen Electric 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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