Correlation Between Shuhua Sports and Bank of Communications
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By analyzing existing cross correlation between Shuhua Sports Co and Bank of Communications, you can compare the effects of market volatilities on Shuhua Sports and Bank of 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 Bank of Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Bank of Communications.
Diversification Opportunities for Shuhua Sports and Bank of Communications
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shuhua and Bank is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Bank of Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of 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 Bank of Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Communications has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Bank of Communications go up and down completely randomly.
Pair Corralation between Shuhua Sports and Bank of Communications
Assuming the 90 days trading horizon Shuhua Sports is expected to generate 9.56 times less return on investment than Bank of Communications. In addition to that, Shuhua Sports is 2.02 times more volatile than Bank of Communications. It trades about 0.0 of its total potential returns per unit of risk. Bank of Communications is currently generating about 0.08 per unit of volatility. If you would invest 460.00 in Bank of Communications on November 9, 2024 and sell it today you would earn a total of 256.00 from holding Bank of Communications or generate 55.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. Bank of Communications
Performance |
| Timeline |
| Shuhua Sports |
Risk-Adjusted Performance
OK
Weak | Strong |
| Bank of Communications |
Risk-Adjusted Performance
Weak
Weak | Strong |
Shuhua Sports and Bank of Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Bank of Communications
The main advantage of trading using opposite Shuhua Sports and Bank of Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Bank of 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 Bank of Communications will offset losses from the drop in Bank of Communications' long position.The idea behind Shuhua Sports Co and Bank of Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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