Correlation Between Ningbo Bohui and Shuhua Sports
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By analyzing existing cross correlation between Ningbo Bohui Chemical and Shuhua Sports Co, you can compare the effects of market volatilities on Ningbo Bohui and Shuhua 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 Ningbo Bohui with a short position of Shuhua Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Bohui and Shuhua Sports.
Diversification Opportunities for Ningbo Bohui and Shuhua Sports
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ningbo and Shuhua is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Bohui Chemical and Shuhua Sports Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shuhua Sports and Ningbo Bohui 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 Ningbo Bohui Chemical are associated (or correlated) with Shuhua Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shuhua Sports has no effect on the direction of Ningbo Bohui i.e., Ningbo Bohui and Shuhua Sports go up and down completely randomly.
Pair Corralation between Ningbo Bohui and Shuhua Sports
Assuming the 90 days trading horizon Ningbo Bohui Chemical is expected to under-perform the Shuhua Sports. But the stock apears to be less risky and, when comparing its historical volatility, Ningbo Bohui Chemical is 1.22 times less risky than Shuhua Sports. The stock trades about -0.04 of its potential returns per unit of risk. The Shuhua Sports Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 858.00 in Shuhua Sports Co on October 20, 2024 and sell it today you would lose (20.00) from holding Shuhua Sports Co or give up 2.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ningbo Bohui Chemical vs. Shuhua Sports Co
Performance |
Timeline |
Ningbo Bohui Chemical |
Shuhua Sports |
Ningbo Bohui and Shuhua Sports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ningbo Bohui and Shuhua Sports
The main advantage of trading using opposite Ningbo Bohui and Shuhua Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Bohui position performs unexpectedly, Shuhua 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 Shuhua Sports will offset losses from the drop in Shuhua Sports' long position.Ningbo Bohui vs. Eastroc Beverage Group | Ningbo Bohui vs. Ligao Foods CoLtd | Ningbo Bohui vs. Xiamen Jihong Package | Ningbo Bohui vs. Mango Excellent Media |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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