Correlation Between Runjian Communication and Shuhua Sports
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By analyzing existing cross correlation between Runjian Communication Co and Shuhua Sports Co, you can compare the effects of market volatilities on Runjian Communication 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 Runjian Communication with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Shuhua Sports.
Diversification Opportunities for Runjian Communication and Shuhua Sports
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Runjian and Shuhua is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Runjian Communication 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 Runjian Communication Co 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 Runjian Communication i.e., Runjian Communication and Shuhua Sports go up and down completely randomly.
Pair Corralation between Runjian Communication and Shuhua Sports
Assuming the 90 days trading horizon Runjian Communication Co is expected to under-perform the Shuhua Sports. In addition to that, Runjian Communication is 1.08 times more volatile than Shuhua Sports Co. It trades about -0.02 of its total potential returns per unit of risk. Shuhua Sports Co is currently generating about -0.02 per unit of volatility. If you would invest 1,010 in Shuhua Sports Co on October 16, 2024 and sell it today you would lose (231.00) from holding Shuhua Sports Co or give up 22.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. Shuhua Sports Co
Performance |
| Timeline |
| Runjian Communication |
| Shuhua Sports |
Runjian Communication and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Shuhua Sports
The main advantage of trading using opposite Runjian Communication and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication 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.The idea behind Runjian Communication Co and Shuhua Sports Co 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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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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