Correlation Between Shuhua Sports and Tongyu Communication
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By analyzing existing cross correlation between Shuhua Sports Co and Tongyu Communication, you can compare the effects of market volatilities on Shuhua Sports and Tongyu Communication 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 Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Tongyu Communication.
Diversification Opportunities for Shuhua Sports and Tongyu Communication
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Tongyu is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Tongyu Communication go up and down completely randomly.
Pair Corralation between Shuhua Sports and Tongyu Communication
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.21 times more return on investment than Tongyu Communication. However, Shuhua Sports is 1.21 times more volatile than Tongyu Communication. It trades about 0.07 of its potential returns per unit of risk. Tongyu Communication is currently generating about -0.07 per unit of risk. If you would invest 802.00 in Shuhua Sports Co on October 22, 2024 and sell it today you would earn a total of 36.00 from holding Shuhua Sports Co or generate 4.49% 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. Tongyu Communication
Performance |
| Timeline |
| Shuhua Sports |
| Tongyu Communication |
Shuhua Sports and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Tongyu Communication
The main advantage of trading using opposite Shuhua Sports and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Shuhua Sports vs. Financial Street Holdings | Shuhua Sports vs. Xiangyang Automobile Bearing | Shuhua Sports vs. Quectel Wireless Solutions | Shuhua Sports vs. Bank of Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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