Correlation Between Shuhua Sports and Caihong Display
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By analyzing existing cross correlation between Shuhua Sports Co and Caihong Display Devices, you can compare the effects of market volatilities on Shuhua Sports and Caihong Display 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 Caihong Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Caihong Display.
Diversification Opportunities for Shuhua Sports and Caihong Display
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shuhua and Caihong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Caihong Display Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caihong Display Devices 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 Caihong Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caihong Display Devices has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Caihong Display go up and down completely randomly.
Pair Corralation between Shuhua Sports and Caihong Display
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.16 times more return on investment than Caihong Display. However, Shuhua Sports is 1.16 times more volatile than Caihong Display Devices. It trades about 0.06 of its potential returns per unit of risk. Caihong Display Devices is currently generating about 0.06 per unit of risk. If you would invest 789.00 in Shuhua Sports Co on November 1, 2024 and sell it today you would earn a total of 26.00 from holding Shuhua Sports Co or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Caihong Display Devices
Performance |
| Timeline |
| Shuhua Sports |
| Caihong Display Devices |
Shuhua Sports and Caihong Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Caihong Display
The main advantage of trading using opposite Shuhua Sports and Caihong Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Caihong Display 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 Caihong Display will offset losses from the drop in Caihong Display's long position.| Shuhua Sports vs. Ming Yang Smart | Shuhua Sports vs. 159681 | Shuhua Sports vs. 159005 | Shuhua Sports vs. Loctek Ergonomic Technology |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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