Correlation Between Shuhua Sports and Railway Signal
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By analyzing existing cross correlation between Shuhua Sports Co and Railway Signal Communication, you can compare the effects of market volatilities on Shuhua Sports and Railway Signal 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 Railway Signal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Railway Signal.
Diversification Opportunities for Shuhua Sports and Railway Signal
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shuhua and Railway is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Railway Signal Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Railway Signal Commu 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 Railway Signal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Railway Signal Commu has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Railway Signal go up and down completely randomly.
Pair Corralation between Shuhua Sports and Railway Signal
Assuming the 90 days trading horizon Shuhua Sports Co is expected to generate 1.09 times more return on investment than Railway Signal. However, Shuhua Sports is 1.09 times more volatile than Railway Signal Communication. It trades about 0.3 of its potential returns per unit of risk. Railway Signal Communication is currently generating about 0.04 per unit of risk. If you would invest 759.00 in Shuhua Sports Co on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Shuhua Sports Co or generate 13.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shuhua Sports Co vs. Railway Signal Communication
Performance |
| Timeline |
| Shuhua Sports |
| Railway Signal Commu |
Shuhua Sports and Railway Signal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Railway Signal
The main advantage of trading using opposite Shuhua Sports and Railway Signal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Railway Signal 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 Railway Signal will offset losses from the drop in Railway Signal's long position.| Shuhua Sports vs. BeiGene | Shuhua Sports vs. Kweichow Moutai Co | Shuhua Sports vs. Beijing Roborock Technology | Shuhua Sports vs. G bits Network Technology |
| Railway Signal vs. Kweichow Moutai Co | Railway Signal vs. NAURA Technology Group | Railway Signal vs. Zhejiang Orient Gene | Railway Signal vs. APT Medical |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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