Correlation Between Hongrun Construction and Shuhua Sports
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By analyzing existing cross correlation between Hongrun Construction Group and Shuhua Sports Co, you can compare the effects of market volatilities on Hongrun Construction and Shuhua Sports 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 Hongrun Construction with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Shuhua Sports.
Diversification Opportunities for Hongrun Construction and Shuhua Sports
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hongrun and Shuhua is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Hongrun Construction 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 Hongrun Construction Group are associated (or correlated) with Shuhua Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuhua Sports has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Shuhua Sports go up and down completely randomly.
Pair Corralation between Hongrun Construction and Shuhua Sports
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 0.77 times more return on investment than Shuhua Sports. However, Hongrun Construction Group is 1.29 times less risky than Shuhua Sports. It trades about 0.17 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about 0.04 per unit of risk. If you would invest 481.00 in Hongrun Construction Group on October 11, 2024 and sell it today you would earn a total of 54.00 from holding Hongrun Construction Group or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Shuhua Sports Co
Performance |
| Timeline |
| Hongrun Construction |
| Shuhua Sports |
Hongrun Construction and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Shuhua Sports
The main advantage of trading using opposite Hongrun Construction and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Shuhua Sports 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 Shuhua Sports will offset losses from the drop in Shuhua Sports' long position.| Hongrun Construction vs. Aba Chemicals Corp | Hongrun Construction vs. Hunan TV Broadcast | Hongrun Construction vs. Zhongshan Broad Ocean Motor | Hongrun Construction vs. Chongqing Road Bridge |
| Shuhua Sports vs. Zhongshan Public Utilities | Shuhua Sports vs. Hongrun Construction Group | Shuhua Sports vs. Zhejiang Kingland Pipeline | Shuhua Sports vs. Anhui Huilong Agricultural |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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