Correlation Between Shengfeng Development and CH Robinson

Can any of the company-specific risk be diversified away by investing in both Shengfeng Development and CH Robinson 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 Shengfeng Development and CH Robinson into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shengfeng Development Limited and CH Robinson Worldwide, you can compare the effects of market volatilities on Shengfeng Development and CH Robinson 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 Shengfeng Development with a short position of CH Robinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengfeng Development and CH Robinson.

Diversification Opportunities for Shengfeng Development and CH Robinson

0.0

Correlation Coefficient

Shengfeng Development  CH Robinson

Pay attention - limited upside

The 3 months correlation between Shengfeng and CHRW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shengfeng Development Limited and CH Robinson Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH Robinson Worldwide and Shengfeng Development 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 Shengfeng Development Limited are associated (or correlated) with CH Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH Robinson Worldwide has no effect on the direction of Shengfeng Development i.e., Shengfeng Development and CH Robinson go up and down completely randomly.

Pair Corralation between Shengfeng Development and CH Robinson

Given the investment horizon of 90 days Shengfeng Development Limited is expected to under-perform the CH Robinson. In addition to that, Shengfeng Development is 1.45 times more volatile than CH Robinson Worldwide. It trades about -0.23 of its total potential returns per unit of risk. CH Robinson Worldwide is currently generating about -0.05 per unit of volatility. If you would invest  10,574  in CH Robinson Worldwide on September 27, 2024 and sell it today you would lose (203.00) from holding CH Robinson Worldwide or give up 1.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Shengfeng Development Limited  vs.  CH Robinson Worldwide

Shengfeng Development

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Shengfeng Development Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

CH Robinson Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CH Robinson Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CH Robinson is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Shengfeng Development and CH Robinson

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

The idea behind Shengfeng Development Limited and CH Robinson Worldwide 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.