Correlation Between Shuhua Sports and Chongqing Changan
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By analyzing existing cross correlation between Shuhua Sports Co and Chongqing Changan Automobile, you can compare the effects of market volatilities on Shuhua Sports and Chongqing Changan 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 Chongqing Changan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Chongqing Changan.
Diversification Opportunities for Shuhua Sports and Chongqing Changan
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Chongqing is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Chongqing Changan Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Changan 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 Chongqing Changan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Changan has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Chongqing Changan go up and down completely randomly.
Pair Corralation between Shuhua Sports and Chongqing Changan
Assuming the 90 days trading horizon Shuhua Sports Co is expected to under-perform the Chongqing Changan. But the stock apears to be less risky and, when comparing its historical volatility, Shuhua Sports Co is 1.06 times less risky than Chongqing Changan. The stock trades about -0.01 of its potential returns per unit of risk. The Chongqing Changan Automobile is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Chongqing Changan Automobile on September 28, 2024 and sell it today you would earn a total of 188.00 from holding Chongqing Changan Automobile or generate 15.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shuhua Sports Co vs. Chongqing Changan Automobile
Performance |
| Timeline |
| Shuhua Sports |
| Chongqing Changan |
Shuhua Sports and Chongqing Changan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Chongqing Changan
The main advantage of trading using opposite Shuhua Sports and Chongqing Changan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Chongqing Changan 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 Chongqing Changan will offset losses from the drop in Chongqing Changan's long position.| Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. China Mobile Limited | Shuhua Sports vs. CNOOC Limited | Shuhua Sports vs. Ping An Insurance |
| Chongqing Changan vs. Qingdao Citymedia Co | Chongqing Changan vs. Guangzhou Jinyi Media | Chongqing Changan vs. Shuhua Sports Co | Chongqing Changan vs. Shanghai CEO Environmental |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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