Correlation Between Shenzhen and Sportsoul
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By analyzing existing cross correlation between Shenzhen AV Display Co and Sportsoul Co Ltd, you can compare the effects of market volatilities on Shenzhen and Sportsoul 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 with a short position of Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and Sportsoul.
Diversification Opportunities for Shenzhen and Sportsoul
Poor diversification
The 3 months correlation between Shenzhen and Sportsoul is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul and Shenzhen 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 AV Display Co are associated (or correlated) with Sportsoul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsoul has no effect on the direction of Shenzhen i.e., Shenzhen and Sportsoul go up and down completely randomly.
Pair Corralation between Shenzhen and Sportsoul
Assuming the 90 days trading horizon Shenzhen is expected to generate 1.47 times less return on investment than Sportsoul. But when comparing it to its historical volatility, Shenzhen AV Display Co is 1.1 times less risky than Sportsoul. It trades about 0.14 of its potential returns per unit of risk. Sportsoul Co Ltd is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Sportsoul Co Ltd on November 4, 2024 and sell it today you would earn a total of 89.00 from holding Sportsoul Co Ltd or generate 8.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. Sportsoul Co Ltd
Performance |
| Timeline |
| Shenzhen AV Display |
| Sportsoul |
Shenzhen and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and Sportsoul
The main advantage of trading using opposite Shenzhen and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen position performs unexpectedly, Sportsoul 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 Sportsoul will offset losses from the drop in Sportsoul's long position.| Shenzhen vs. Yili Chuanning Biotechnology | Shenzhen vs. Zhonghong Pulin Medical | Shenzhen vs. Guangdong Marubi Biotechnology | Shenzhen vs. Eyebright Medical Technology |
| Sportsoul vs. Guangzhou KingTeller Technology | Sportsoul vs. Zhejiang Construction Investment | Sportsoul vs. Olympic Circuit Technology | Sportsoul vs. Jiangsu Financial Leasing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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