Correlation Between Shuhua Sports and Long Yuan
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By analyzing existing cross correlation between Shuhua Sports Co and Long Yuan Construction, you can compare the effects of market volatilities on Shuhua Sports and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Long Yuan.
Diversification Opportunities for Shuhua Sports and Long Yuan
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shuhua and Long is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan Construction 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Long Yuan go up and down completely randomly.
Pair Corralation between Shuhua Sports and Long Yuan
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 0.95 times more return on investment than Long Yuan. However, Shuhua Sports Co is 1.05 times less risky than Long Yuan. It trades about -0.02 of its potential returns per unit of risk. Long Yuan Construction is currently generating about -0.02 per unit of risk. If you would invest 1,094 in Shuhua Sports Co on October 16, 2024 and sell it today you would lose (275.00) from holding Shuhua Sports Co or give up 25.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Long Yuan Construction
Performance |
| Timeline |
| Shuhua Sports |
| Long Yuan Construction |
Shuhua Sports and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Long Yuan
The main advantage of trading using opposite Shuhua Sports and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Shuhua Sports vs. Eyebright Medical Technology | Shuhua Sports vs. China Minmetals Rare | Shuhua Sports vs. Keeson Technology Corp | Shuhua Sports vs. Rising Nonferrous Metals |
| Long Yuan vs. Anhui Xinhua Media | Long Yuan vs. Longjian Road Bridge | Long Yuan vs. Heilongjiang Transport Development | Long Yuan vs. Shuhua Sports Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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