Correlation Between Nantong Haixing and Shuhua Sports
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By analyzing existing cross correlation between Nantong Haixing Electronics and Shuhua Sports Co, you can compare the effects of market volatilities on Nantong Haixing 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 Nantong Haixing with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nantong Haixing and Shuhua Sports.
Diversification Opportunities for Nantong Haixing and Shuhua Sports
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nantong and Shuhua is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nantong Haixing Electronics and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Nantong Haixing 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 Nantong Haixing Electronics 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 Nantong Haixing i.e., Nantong Haixing and Shuhua Sports go up and down completely randomly.
Pair Corralation between Nantong Haixing and Shuhua Sports
Assuming the 90 days trading horizon Nantong Haixing Electronics is expected to generate 0.51 times more return on investment than Shuhua Sports. However, Nantong Haixing Electronics is 1.97 times less risky than Shuhua Sports. It trades about 0.39 of its potential returns per unit of risk. Shuhua Sports Co is currently generating about -0.06 per unit of risk. If you would invest 1,227 in Nantong Haixing Electronics on November 7, 2024 and sell it today you would earn a total of 129.00 from holding Nantong Haixing Electronics or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nantong Haixing Electronics vs. Shuhua Sports Co
Performance |
| Timeline |
| Nantong Haixing Elec |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shuhua Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Nantong Haixing and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nantong Haixing and Shuhua Sports
The main advantage of trading using opposite Nantong Haixing and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nantong Haixing 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.The idea behind Nantong Haixing Electronics and Shuhua Sports Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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