Correlation Between Shuhua Sports and Shandong Hongchuang
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By analyzing existing cross correlation between Shuhua Sports Co and Shandong Hongchuang Aluminum, you can compare the effects of market volatilities on Shuhua Sports and Shandong Hongchuang 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 Shandong Hongchuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Shandong Hongchuang.
Diversification Opportunities for Shuhua Sports and Shandong Hongchuang
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Shandong is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Shandong Hongchuang Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hongchuang 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 Shandong Hongchuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hongchuang has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Shandong Hongchuang go up and down completely randomly.
Pair Corralation between Shuhua Sports and Shandong Hongchuang
Assuming the 90 days trading horizon Shuhua Sports Co is expected to under-perform the Shandong Hongchuang. But the stock apears to be less risky and, when comparing its historical volatility, Shuhua Sports Co is 1.04 times less risky than Shandong Hongchuang. The stock trades about -0.09 of its potential returns per unit of risk. The Shandong Hongchuang Aluminum is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 785.00 in Shandong Hongchuang Aluminum on October 14, 2024 and sell it today you would earn a total of 182.00 from holding Shandong Hongchuang Aluminum or generate 23.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shuhua Sports Co vs. Shandong Hongchuang Aluminum
Performance |
| Timeline |
| Shuhua Sports |
| Shandong Hongchuang |
Shuhua Sports and Shandong Hongchuang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Shandong Hongchuang
The main advantage of trading using opposite Shuhua Sports and Shandong Hongchuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Shandong Hongchuang 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 Shandong Hongchuang will offset losses from the drop in Shandong Hongchuang's long position.| Shuhua Sports vs. Sinocat Environmental Technology | Shuhua Sports vs. Elite Color Environmental | Shuhua Sports vs. Nanxing Furniture Machinery | Shuhua Sports vs. Aofu Environmental Technology |
| Shandong Hongchuang vs. Vats Liquor Chain | Shandong Hongchuang vs. Shuhua Sports Co | Shandong Hongchuang vs. Anhui Jianghuai Automobile | Shandong Hongchuang vs. Fibocom Wireless |
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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