Correlation Between Shuhua Sports and Sinofibers Technology
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By analyzing existing cross correlation between Shuhua Sports Co and Sinofibers Technology Co, you can compare the effects of market volatilities on Shuhua Sports and Sinofibers Technology 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 Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Sinofibers Technology.
Diversification Opportunities for Shuhua Sports and Sinofibers Technology
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shuhua and Sinofibers is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers Technology 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 Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Shuhua Sports and Sinofibers Technology
Assuming the 90 days trading horizon Shuhua Sports is expected to generate 1.55 times less return on investment than Sinofibers Technology. But when comparing it to its historical volatility, Shuhua Sports Co is 1.89 times less risky than Sinofibers Technology. It trades about 0.16 of its potential returns per unit of risk. Sinofibers Technology Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,006 in Sinofibers Technology Co on September 3, 2024 and sell it today you would earn a total of 707.00 from holding Sinofibers Technology Co or generate 35.24% 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. Sinofibers Technology Co
Performance |
| Timeline |
| Shuhua Sports |
| Sinofibers Technology |
Shuhua Sports and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Sinofibers Technology
The main advantage of trading using opposite Shuhua Sports and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology's long position.| Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. China Mobile Limited | Shuhua Sports vs. Industrial and Commercial | Shuhua Sports vs. China Life Insurance |
| Sinofibers Technology vs. Zijin Mining Group | Sinofibers Technology vs. Baoshan Iron Steel | Sinofibers Technology vs. Rongsheng Petrochemical Co | Sinofibers Technology vs. Hoshine Silicon Ind |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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