Correlation Between Sportsoul and Dongguan Aohai
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By analyzing existing cross correlation between Sportsoul Co Ltd and Dongguan Aohai Technology, you can compare the effects of market volatilities on Sportsoul and Dongguan Aohai 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 Sportsoul with a short position of Dongguan Aohai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsoul and Dongguan Aohai.
Diversification Opportunities for Sportsoul and Dongguan Aohai
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sportsoul and Dongguan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sportsoul Co Ltd and Dongguan Aohai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Aohai Technology and Sportsoul 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 Sportsoul Co Ltd are associated (or correlated) with Dongguan Aohai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Aohai Technology has no effect on the direction of Sportsoul i.e., Sportsoul and Dongguan Aohai go up and down completely randomly.
Pair Corralation between Sportsoul and Dongguan Aohai
Assuming the 90 days trading horizon Sportsoul is expected to generate 3.35 times less return on investment than Dongguan Aohai. But when comparing it to its historical volatility, Sportsoul Co Ltd is 1.08 times less risky than Dongguan Aohai. It trades about 0.06 of its potential returns per unit of risk. Dongguan Aohai Technology is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,522 in Dongguan Aohai Technology on September 26, 2024 and sell it today you would earn a total of 1,485 from holding Dongguan Aohai Technology or generate 58.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sportsoul Co Ltd vs. Dongguan Aohai Technology
Performance |
Timeline |
Sportsoul |
Dongguan Aohai Technology |
Sportsoul and Dongguan Aohai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sportsoul and Dongguan Aohai
The main advantage of trading using opposite Sportsoul and Dongguan Aohai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsoul position performs unexpectedly, Dongguan Aohai 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 Dongguan Aohai will offset losses from the drop in Dongguan Aohai's long position.Sportsoul vs. PetroChina Co Ltd | Sportsoul vs. China Mobile Limited | Sportsoul vs. CNOOC Limited | Sportsoul 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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