Correlation Between Shuhua Sports and Dongjiang Environmental
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By analyzing existing cross correlation between Shuhua Sports Co and Dongjiang Environmental Co, you can compare the effects of market volatilities on Shuhua Sports and Dongjiang Environmental 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 Dongjiang Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Dongjiang Environmental.
Diversification Opportunities for Shuhua Sports and Dongjiang Environmental
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shuhua and Dongjiang is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Dongjiang Environmental Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongjiang Environmental 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 Dongjiang Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongjiang Environmental has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Dongjiang Environmental go up and down completely randomly.
Pair Corralation between Shuhua Sports and Dongjiang Environmental
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 0.98 times more return on investment than Dongjiang Environmental. However, Shuhua Sports Co is 1.02 times less risky than Dongjiang Environmental. It trades about 0.28 of its potential returns per unit of risk. Dongjiang Environmental Co is currently generating about -0.1 per unit of risk. If you would invest 758.00 in Shuhua Sports Co on September 1, 2024 and sell it today you would earn a total of 101.00 from holding Shuhua Sports Co or generate 13.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Dongjiang Environmental Co
Performance |
| Timeline |
| Shuhua Sports |
| Dongjiang Environmental |
Shuhua Sports and Dongjiang Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Dongjiang Environmental
The main advantage of trading using opposite Shuhua Sports and Dongjiang Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Dongjiang Environmental 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 Dongjiang Environmental will offset losses from the drop in Dongjiang Environmental's long position.| Shuhua Sports vs. Industrial and Commercial | Shuhua Sports vs. Agricultural Bank of | Shuhua Sports vs. China Construction Bank | Shuhua Sports vs. Bank of China |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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