Correlation Between Shuhua Sports and Liaoning Chengda
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By analyzing existing cross correlation between Shuhua Sports Co and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Shuhua Sports and Liaoning Chengda 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 Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Liaoning Chengda.
Diversification Opportunities for Shuhua Sports and Liaoning Chengda
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shuhua and Liaoning is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio 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 Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Shuhua Sports and Liaoning Chengda
Assuming the 90 days trading horizon Shuhua Sports Co is expected to under-perform the Liaoning Chengda. In addition to that, Shuhua Sports is 1.61 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.01 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.01 per unit of volatility. If you would invest 2,976 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (346.00) from holding Liaoning Chengda Biotechnology or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shuhua Sports Co vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Shuhua Sports |
| Liaoning Chengda Bio |
Shuhua Sports and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shuhua Sports and Liaoning Chengda
The main advantage of trading using opposite Shuhua Sports and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Liaoning Chengda 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 Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Shuhua Sports vs. PetroChina Co Ltd | Shuhua Sports vs. China Mobile Limited | Shuhua Sports vs. CNOOC Limited | Shuhua Sports vs. Ping An Insurance |
| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. Agricultural Bank of | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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