Correlation Between Shuhua Sports and Sunwave Communications
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By analyzing existing cross correlation between Shuhua Sports Co and Sunwave Communications Co, you can compare the effects of market volatilities on Shuhua Sports and Sunwave Communications 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 Sunwave Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Sunwave Communications.
Diversification Opportunities for Shuhua Sports and Sunwave Communications
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shuhua and Sunwave is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Sunwave Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunwave Communications 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 Sunwave Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunwave Communications has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Sunwave Communications go up and down completely randomly.
Pair Corralation between Shuhua Sports and Sunwave Communications
Assuming the 90 days trading horizon Shuhua Sports Co is expected to under-perform the Sunwave Communications. But the stock apears to be less risky and, when comparing its historical volatility, Shuhua Sports Co is 1.22 times less risky than Sunwave Communications. The stock trades about -0.03 of its potential returns per unit of risk. The Sunwave Communications Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 634.00 in Sunwave Communications Co on August 26, 2024 and sell it today you would lose (40.00) from holding Sunwave Communications Co or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Sunwave Communications Co
Performance |
| Timeline |
| Shuhua Sports |
| Sunwave Communications |
Shuhua Sports and Sunwave Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Sunwave Communications
The main advantage of trading using opposite Shuhua Sports and Sunwave Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Sunwave Communications 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 Sunwave Communications will offset losses from the drop in Sunwave Communications' long position.| Shuhua Sports vs. Shenzhen MYS Environmental | Shuhua Sports vs. AVIC Fund Management | Shuhua Sports vs. Shenzhen Bingchuan Network | Shuhua Sports vs. Penghua Shenzhen Energy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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