Correlation Between Shuhua Sports and Xiamen Bank
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By analyzing existing cross correlation between Shuhua Sports Co and Xiamen Bank Co, you can compare the effects of market volatilities on Shuhua Sports and Xiamen Bank 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 Xiamen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shuhua Sports and Xiamen Bank.
Diversification Opportunities for Shuhua Sports and Xiamen Bank
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shuhua and Xiamen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Shuhua Sports Co and Xiamen Bank Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Bank 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 Xiamen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Bank has no effect on the direction of Shuhua Sports i.e., Shuhua Sports and Xiamen Bank go up and down completely randomly.
Pair Corralation between Shuhua Sports and Xiamen Bank
Assuming the 90 days trading horizon Shuhua Sports is expected to generate 10.08 times less return on investment than Xiamen Bank. In addition to that, Shuhua Sports is 1.3 times more volatile than Xiamen Bank Co. It trades about 0.0 of its total potential returns per unit of risk. Xiamen Bank Co is currently generating about 0.05 per unit of volatility. If you would invest 509.00 in Xiamen Bank Co on September 25, 2024 and sell it today you would earn a total of 50.00 from holding Xiamen Bank Co or generate 9.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shuhua Sports Co vs. Xiamen Bank Co
Performance |
Timeline |
Shuhua Sports |
Xiamen Bank |
Shuhua Sports and Xiamen Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shuhua Sports and Xiamen Bank
The main advantage of trading using opposite Shuhua Sports and Xiamen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shuhua Sports position performs unexpectedly, Xiamen Bank 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 Xiamen Bank will offset losses from the drop in Xiamen Bank'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 |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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