Correlation Between Shuhua Sports and Zotye Automobile
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By analyzing existing cross correlation between Shuhua Sports Co and Zotye Automobile Co, you can compare the effects of market volatilities on Shuhua Sports and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Zotye Automobile.
Diversification Opportunities for Shuhua Sports and Zotye Automobile
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shuhua and Zotye is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Zotye Automobile go up and down completely randomly.
Pair Corralation between Shuhua Sports and Zotye Automobile
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 0.68 times more return on investment than Zotye Automobile. However, Shuhua Sports Co is 1.48 times less risky than Zotye Automobile. It trades about -0.01 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 1,011 in Shuhua Sports Co on October 16, 2024 and sell it today you would lose (232.00) from holding Shuhua Sports Co or give up 22.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Zotye Automobile Co
Performance |
| Timeline |
| Shuhua Sports |
| Zotye Automobile |
Shuhua Sports and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Zotye Automobile
The main advantage of trading using opposite Shuhua Sports and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Shuhua Sports vs. Fujian Anjoy Foods | Shuhua Sports vs. Ligao Foods CoLtd | Shuhua Sports vs. Jilin Chemical Fibre | Shuhua Sports vs. Jinsanjiang Silicon Material |
| Zotye Automobile vs. Shuhua Sports Co | Zotye Automobile vs. Changchun Engley Automobile | Zotye Automobile vs. Aba Chemicals Corp | Zotye Automobile vs. Hainan Haiqi Transportation |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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