Correlation Between Shenzhen Kexin and Shuhua Sports
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By analyzing existing cross correlation between Shenzhen Kexin Communication and Shuhua Sports Co, you can compare the effects of market volatilities on Shenzhen Kexin 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 Shenzhen Kexin with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kexin and Shuhua Sports.
Diversification Opportunities for Shenzhen Kexin and Shuhua Sports
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shenzhen and Shuhua is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kexin Communication and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Shenzhen Kexin 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 Shenzhen Kexin Communication 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 Shenzhen Kexin i.e., Shenzhen Kexin and Shuhua Sports go up and down completely randomly.
Pair Corralation between Shenzhen Kexin and Shuhua Sports
Assuming the 90 days trading horizon Shenzhen Kexin Communication is expected to generate 1.64 times more return on investment than Shuhua Sports. However, Shenzhen Kexin is 1.64 times more volatile than Shuhua Sports Co. It trades about 0.05 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about -0.03 per unit of risk. If you would invest 1,126 in Shenzhen Kexin Communication on September 3, 2024 and sell it today you would earn a total of 235.00 from holding Shenzhen Kexin Communication or generate 20.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Kexin Communication vs. Shuhua Sports Co
Performance |
| Timeline |
| Shenzhen Kexin Commu |
| Shuhua Sports |
Shenzhen Kexin and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Kexin and Shuhua Sports
The main advantage of trading using opposite Shenzhen Kexin and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Kexin 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.| Shenzhen Kexin vs. Agricultural Bank of | Shenzhen Kexin vs. China Construction Bank | Shenzhen Kexin vs. Postal Savings Bank | Shenzhen Kexin vs. Bank of Communications |
| Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. China Mobile Limited | Shuhua Sports vs. Industrial and Commercial | Shuhua Sports vs. China Life Insurance |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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