Correlation Between Shuhua Sports and China Life
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By analyzing existing cross correlation between Shuhua Sports Co and China Life Insurance, you can compare the effects of market volatilities on Shuhua Sports and China Life 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 China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and China Life.
Diversification Opportunities for Shuhua Sports and China Life
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shuhua and China is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance 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 China Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and China Life go up and down completely randomly.
Pair Corralation between Shuhua Sports and China Life
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 2.73 times more return on investment than China Life. However, Shuhua Sports is 2.73 times more volatile than China Life Insurance. It trades about -0.09 of its potential returns per unit of risk. China Life Insurance is currently generating about -0.34 per unit of risk. If you would invest 902.00 in Shuhua Sports Co on October 14, 2024 and sell it today you would lose (81.00) from holding Shuhua Sports Co or give up 8.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shuhua Sports Co vs. China Life Insurance
Performance |
| Timeline |
| Shuhua Sports |
| China Life Insurance |
Shuhua Sports and China Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and China Life
The main advantage of trading using opposite Shuhua Sports and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, China Life 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 China Life will offset losses from the drop in China Life's long position.| Shuhua Sports vs. Sinocat Environmental Technology | Shuhua Sports vs. Elite Color Environmental | Shuhua Sports vs. Nanxing Furniture Machinery | Shuhua Sports vs. Aofu Environmental Technology |
| China Life vs. State Grid InformationCommunication | China Life vs. Bank of Communications | China Life vs. Anji Foodstuff Co | China Life vs. Wintao Communications 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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