Correlation Between Shuhua Sports and Western Mining
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By analyzing existing cross correlation between Shuhua Sports Co and Western Mining Co, you can compare the effects of market volatilities on Shuhua Sports and Western Mining 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 Western Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Western Mining.
Diversification Opportunities for Shuhua Sports and Western Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Western is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Western Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Mining 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 Western Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Mining has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Western Mining go up and down completely randomly.
Pair Corralation between Shuhua Sports and Western Mining
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.07 times more return on investment than Western Mining. However, Shuhua Sports is 1.07 times more volatile than Western Mining Co. It trades about 0.2 of its potential returns per unit of risk. Western Mining Co is currently generating about 0.14 per unit of risk. If you would invest 664.00 in Shuhua Sports Co on September 12, 2024 and sell it today you would earn a total of 215.00 from holding Shuhua Sports Co or generate 32.38% 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. Western Mining Co
Performance |
| Timeline |
| Shuhua Sports |
| Western Mining |
Shuhua Sports and Western Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Western Mining
The main advantage of trading using opposite Shuhua Sports and Western Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Western Mining 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 Western Mining will offset losses from the drop in Western Mining's long position.| Shuhua Sports vs. Lutian Machinery Co | Shuhua Sports vs. China Longyuan Power | Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. Bank of China |
| Western Mining vs. Zijin Mining Group | Western Mining vs. Wanhua Chemical Group | Western Mining vs. Baoshan Iron Steel | Western Mining vs. Shandong Gold Mining |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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