Correlation Between Shuhua Sports and Xinjiang Communications
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By analyzing existing cross correlation between Shuhua Sports Co and Xinjiang Communications Construction, you can compare the effects of market volatilities on Shuhua Sports and Xinjiang 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 Xinjiang Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Xinjiang Communications.
Diversification Opportunities for Shuhua Sports and Xinjiang Communications
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shuhua and Xinjiang is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Xinjiang Communications Constr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinjiang 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 Xinjiang Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinjiang Communications has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Xinjiang Communications go up and down completely randomly.
Pair Corralation between Shuhua Sports and Xinjiang Communications
Assuming the 90 days trading horizon Shuhua Sports is expected to generate 1.29 times less return on investment than Xinjiang Communications. But when comparing it to its historical volatility, Shuhua Sports Co is 1.43 times less risky than Xinjiang Communications. It trades about 0.17 of its potential returns per unit of risk. Xinjiang Communications Construction is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 964.00 in Xinjiang Communications Construction on September 2, 2024 and sell it today you would earn a total of 316.00 from holding Xinjiang Communications Construction or generate 32.78% 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. Xinjiang Communications Constr
Performance |
| Timeline |
| Shuhua Sports |
| Xinjiang Communications |
Shuhua Sports and Xinjiang Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Xinjiang Communications
The main advantage of trading using opposite Shuhua Sports and Xinjiang Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Xinjiang 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 Xinjiang Communications will offset losses from the drop in Xinjiang Communications' long position.| Shuhua Sports vs. Nanjing Putian Telecommunications | Shuhua Sports vs. Shenzhen Hifuture Electric | Shuhua Sports vs. Tianjin Realty Development | Shuhua Sports vs. Shenyang Huitian Thermal |
| Xinjiang Communications vs. Ming Yang Smart | Xinjiang Communications vs. 159681 | Xinjiang Communications vs. 159005 | Xinjiang Communications vs. Loctek Ergonomic Technology |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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