Correlation Between Shuhua Sports and Shenzhen Shenbao
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By analyzing existing cross correlation between Shuhua Sports Co and Shenzhen Shenbao Industrial, you can compare the effects of market volatilities on Shuhua Sports and Shenzhen Shenbao 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 Shuhua Sports with a short position of Shenzhen Shenbao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Shenzhen Shenbao.
Diversification Opportunities for Shuhua Sports and Shenzhen Shenbao
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shuhua and Shenzhen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Shenzhen Shenbao Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Shenbao Ind and Shuhua Sports 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 Shuhua Sports Co are associated (or correlated) with Shenzhen Shenbao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Shenbao Ind has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Shenzhen Shenbao go up and down completely randomly.
Pair Corralation between Shuhua Sports and Shenzhen Shenbao
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.35 times more return on investment than Shenzhen Shenbao. However, Shuhua Sports is 1.35 times more volatile than Shenzhen Shenbao Industrial. It trades about 0.23 of its potential returns per unit of risk. Shenzhen Shenbao Industrial is currently generating about 0.13 per unit of risk. If you would invest 791.00 in Shuhua Sports Co on September 13, 2024 and sell it today you would earn a total of 88.00 from holding Shuhua Sports Co or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shuhua Sports Co vs. Shenzhen Shenbao Industrial
Performance |
| Timeline |
| Shuhua Sports |
| Shenzhen Shenbao Ind |
Shuhua Sports and Shenzhen Shenbao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Shenzhen Shenbao
The main advantage of trading using opposite Shuhua Sports and Shenzhen Shenbao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Shenzhen Shenbao 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 Shenzhen Shenbao will offset losses from the drop in Shenzhen Shenbao's long position.| Shuhua Sports vs. Lutian Machinery Co | Shuhua Sports vs. China Longyuan Power | Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. Bank of China |
| Shenzhen Shenbao vs. Sportsoul Co Ltd | Shenzhen Shenbao vs. Shuhua Sports Co | Shenzhen Shenbao vs. Heilongjiang Publishing Media | Shenzhen Shenbao vs. Mango Excellent Media |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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