Correlation Between Shuhua Sports and Shantui Construction
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By analyzing existing cross correlation between Shuhua Sports Co and Shantui Construction Machinery, you can compare the effects of market volatilities on Shuhua Sports and Shantui Construction 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 Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Shantui Construction.
Diversification Opportunities for Shuhua Sports and Shantui Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Shantui is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction 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 Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Shantui Construction go up and down completely randomly.
Pair Corralation between Shuhua Sports and Shantui Construction
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.44 times more return on investment than Shantui Construction. However, Shuhua Sports is 1.44 times more volatile than Shantui Construction Machinery. It trades about 0.05 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.07 per unit of risk. If you would invest 798.00 in Shuhua Sports Co on October 25, 2024 and sell it today you would earn a total of 24.00 from holding Shuhua Sports Co or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Shantui Construction Machinery
Performance |
| Timeline |
| Shuhua Sports |
| Shantui Construction |
Shuhua Sports and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Shantui Construction
The main advantage of trading using opposite Shuhua Sports and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Shantui Construction 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. Gansu Jiu Steel | Shuhua Sports vs. Ming Yang Smart | Shuhua Sports vs. Aba Chemicals Corp |
| Shantui Construction vs. Kweichow Moutai Co | Shantui Construction vs. Contemporary Amperex Technology | Shantui Construction vs. Beijing Roborock Technology | Shantui Construction vs. BYD Co Ltd |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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