Correlation Between Shanghai Yanpu and Shuhua Sports
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By analyzing existing cross correlation between Shanghai Yanpu Metal and Shuhua Sports Co, you can compare the effects of market volatilities on Shanghai Yanpu 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 Shanghai Yanpu with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Yanpu and Shuhua Sports.
Diversification Opportunities for Shanghai Yanpu and Shuhua Sports
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Shuhua is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Yanpu Metal and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Shanghai Yanpu 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 Shanghai Yanpu Metal 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 Shanghai Yanpu i.e., Shanghai Yanpu and Shuhua Sports go up and down completely randomly.
Pair Corralation between Shanghai Yanpu and Shuhua Sports
Assuming the 90 days trading horizon Shanghai Yanpu Metal is expected to generate 0.51 times more return on investment than Shuhua Sports. However, Shanghai Yanpu Metal is 1.95 times less risky than Shuhua Sports. It trades about 0.04 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 3,595 in Shanghai Yanpu Metal on November 7, 2024 and sell it today you would earn a total of 32.00 from holding Shanghai Yanpu Metal or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Yanpu Metal vs. Shuhua Sports Co
Performance |
| Timeline |
| Shanghai Yanpu Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Shuhua Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shanghai Yanpu and Shuhua Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Yanpu and Shuhua Sports
The main advantage of trading using opposite Shanghai Yanpu and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Yanpu 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 Shanghai Yanpu Metal 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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