Correlation Between China International and Shuhua Sports
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By analyzing existing cross correlation between China International Capital and Shuhua Sports Co, you can compare the effects of market volatilities on China International 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 International with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of China International and Shuhua Sports.
Diversification Opportunities for China International and Shuhua Sports
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shuhua is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China International Capital 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 International 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 International Capital 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 International i.e., China International and Shuhua Sports go up and down completely randomly.
Pair Corralation between China International and Shuhua Sports
Assuming the 90 days trading horizon China International Capital is expected to generate 1.5 times more return on investment than Shuhua Sports. However, China International is 1.5 times more volatile than Shuhua Sports Co. It trades about 0.14 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about 0.17 per unit of risk. If you would invest 2,736 in China International Capital on September 2, 2024 and sell it today you would earn a total of 820.00 from holding China International Capital or generate 29.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China International Capital vs. Shuhua Sports Co
Performance |
| Timeline |
| China International |
| Shuhua Sports |
China International and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China International and Shuhua Sports
The main advantage of trading using opposite China International and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China International 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 International vs. UE Furniture Co | China International vs. CICC Fund Management | China International vs. Hunan Mendale Hometextile | China International vs. China Asset Management |
| Shuhua Sports vs. Nanjing Putian Telecommunications | Shuhua Sports vs. Shenzhen Hifuture Electric | Shuhua Sports vs. Tianjin Realty Development | Shuhua Sports vs. Shenyang Huitian Thermal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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