Correlation Between Century Wind and Senao Networks

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

By analyzing existing cross correlation between Century Wind Power and Senao Networks, you can compare the effects of market volatilities on Century Wind and Senao Networks 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 Century Wind with a short position of Senao Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Wind and Senao Networks.

Diversification Opportunities for Century Wind and Senao Networks

-0.21

Correlation Coefficient

Century Wind  Senao Networks

Very good diversification

The 3 months correlation between Century and Senao is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Century Wind Power and Senao Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao Networks and Century Wind 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 Century Wind Power are associated (or correlated) with Senao Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao Networks has no effect on the direction of Century Wind i.e., Century Wind and Senao Networks go up and down completely randomly.

Pair Corralation between Century Wind and Senao Networks

Assuming the 90 days trading horizon Century Wind Power is expected to generate 1.02 times more return on investment than Senao Networks. However, Century Wind is 1.02 times more volatile than Senao Networks. It trades about 0.12 of its potential returns per unit of risk. Senao Networks is currently generating about 0.0 per unit of risk. If you would invest  25,285  in Century Wind Power on April 25, 2025 and sell it today you would earn a total of  4,715  from holding Century Wind Power or generate 18.65% return on investment over 90 days.

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

Century Wind Power  vs.  Senao Networks

Century Wind Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Century Wind Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Century Wind showed solid returns over the last few months and may actually be approaching a breakup point.

Senao Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days Senao Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Senao Networks is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Century Wind and Senao Networks

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

The idea behind Century Wind Power and Senao Networks 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.