Correlation Between Shenyang Huitian and Lander Sports

Can any of the company-specific risk be diversified away by investing in both Shenyang Huitian and Lander Sports at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Shenyang Huitian and Lander Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenyang Huitian Thermal and Lander Sports Development, you can compare the effects of market volatilities on Shenyang Huitian and Lander Sports 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 Shenyang Huitian with a short position of Lander Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Lander Sports.

Diversification Opportunities for Shenyang Huitian and Lander Sports

0.94

Correlation Coefficient

Shenyang Huitian  Lander Sports

Almost no diversification

The 3 months correlation between Shenyang and Lander is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal and Lander Sports Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lander Sports Development and Shenyang Huitian 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 Shenyang Huitian Thermal are associated (or correlated) with Lander Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lander Sports Development has no effect on the direction of Shenyang Huitian i.e., Shenyang Huitian and Lander Sports go up and down completely randomly.

Pair Corralation between Shenyang Huitian and Lander Sports

Assuming the 90 days trading horizon Shenyang Huitian is expected to generate 1.01 times less return on investment than Lander Sports. In addition to that, Shenyang Huitian is 1.04 times more volatile than Lander Sports Development. It trades about 0.02 of its total potential returns per unit of risk. Lander Sports Development is currently generating about 0.02 per unit of volatility. If you would invest  297.00  in Lander Sports Development on September 5, 2024 and sell it today you would earn a total of  35.00  from holding Lander Sports Development or generate 11.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.79%
Values	Daily Returns

Shenyang Huitian Thermal  vs.  Lander Sports Development

Shenyang Huitian Thermal

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shenyang Huitian Thermal are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenyang Huitian sustained solid returns over the last few months and may actually be approaching a breakup point.

Lander Sports Development

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lander Sports Development are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lander Sports sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shenyang Huitian and Lander Sports

The main advantage of trading using opposite Shenyang Huitian and Lander Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian position performs unexpectedly, Lander Sports 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 Lander Sports will offset losses from the drop in Lander Sports' long position.

The idea behind Shenyang Huitian Thermal and Lander Sports Development 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.