Correlation Between Shengfeng Development and Prosegur Cash

Can any of the company-specific risk be diversified away by investing in both Shengfeng Development and Prosegur Cash 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 Prosegur Cash 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 Prosegur Cash SA, you can compare the effects of market volatilities on Shengfeng Development and Prosegur Cash 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 Prosegur Cash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengfeng Development and Prosegur Cash.

Diversification Opportunities for Shengfeng Development and Prosegur Cash

0.0

Correlation Coefficient

Shengfeng Development  Prosegur Cash

Pay attention - limited upside

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

Pair Corralation between Shengfeng Development and Prosegur Cash

If you would invest (100.00) in Prosegur Cash SA on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Prosegur Cash SA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Shengfeng Development Limited  vs.  Prosegur Cash SA

Shengfeng Development

Risk-Adjusted Performance

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 quite persistent basic indicators, Shengfeng Development is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Prosegur Cash SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prosegur Cash SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Prosegur Cash is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Shengfeng Development and Prosegur Cash

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

The idea behind Shengfeng Development Limited and Prosegur Cash SA 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.