Correlation Between Caihong Display and Sportsoul
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By analyzing existing cross correlation between Caihong Display Devices and Sportsoul Co Ltd, you can compare the effects of market volatilities on Caihong Display 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 Caihong Display with a short position of Sportsoul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caihong Display and Sportsoul.
Diversification Opportunities for Caihong Display and Sportsoul
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caihong and Sportsoul is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Caihong Display Devices and Sportsoul Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsoul and Caihong Display 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 Caihong Display Devices 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 Caihong Display i.e., Caihong Display and Sportsoul go up and down completely randomly.
Pair Corralation between Caihong Display and Sportsoul
Assuming the 90 days trading horizon Caihong Display Devices is expected to under-perform the Sportsoul. But the stock apears to be less risky and, when comparing its historical volatility, Caihong Display Devices is 1.23 times less risky than Sportsoul. The stock trades about -0.11 of its potential returns per unit of risk. The Sportsoul Co Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,258 in Sportsoul Co Ltd on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Sportsoul Co Ltd or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caihong Display Devices vs. Sportsoul Co Ltd
Performance |
| Timeline |
| Caihong Display Devices |
| Sportsoul |
Caihong Display and Sportsoul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caihong Display and Sportsoul
The main advantage of trading using opposite Caihong Display and Sportsoul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caihong Display 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.| Caihong Display vs. Nanjing Putian Telecommunications | Caihong Display vs. Shenzhen Hifuture Electric | Caihong Display vs. Shenyang Huitian Thermal | Caihong Display vs. Jiangsu Xinning Modern |
| Sportsoul vs. Shenzhen MYS Environmental | Sportsoul vs. AVIC Fund Management | Sportsoul vs. Shenzhen Bingchuan Network | Sportsoul vs. Penghua Shenzhen Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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