Correlation Between China State and Shuhua Sports
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By analyzing existing cross correlation between China State Construction and Shuhua Sports Co, you can compare the effects of market volatilities on China State 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 China State with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and Shuhua Sports.
Diversification Opportunities for China State and Shuhua Sports
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shuhua is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and China State 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 China State Construction 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 China State i.e., China State and Shuhua Sports go up and down completely randomly.
Pair Corralation between China State and Shuhua Sports
Assuming the 90 days trading horizon China State Construction is expected to generate 0.7 times more return on investment than Shuhua Sports. However, China State Construction is 1.43 times less risky than Shuhua Sports. It trades about 0.02 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about 0.0 per unit of risk. If you would invest 553.00 in China State Construction on September 2, 2024 and sell it today you would earn a total of 45.00 from holding China State Construction or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. Shuhua Sports Co
Performance |
| Timeline |
| China State Construction |
| Shuhua Sports |
China State and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and Shuhua Sports
The main advantage of trading using opposite China State and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. 159681 | China State vs. 159005 | China State vs. Loctek Ergonomic Technology | China State vs. 516220 |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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