Correlation Between DOCDATA and Shunfeng International

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

By analyzing existing cross correlation between DOCDATA and Shunfeng International Clean, you can compare the effects of market volatilities on DOCDATA and Shunfeng International 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 DOCDATA with a short position of Shunfeng International. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOCDATA and Shunfeng International.

Diversification Opportunities for DOCDATA and Shunfeng International

0.52

Correlation Coefficient

DOCDATA  Shunfeng International

Very weak diversification

The 3 months correlation between DOCDATA and Shunfeng is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding DOCDATA and Shunfeng International Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shunfeng International and DOCDATA 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 DOCDATA are associated (or correlated) with Shunfeng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shunfeng International has no effect on the direction of DOCDATA i.e., DOCDATA and Shunfeng International go up and down completely randomly.

Pair Corralation between DOCDATA and Shunfeng International

Assuming the 90 days trading horizon DOCDATA is expected to generate 4.05 times less return on investment than Shunfeng International. But when comparing it to its historical volatility, DOCDATA is 2.92 times less risky than Shunfeng International. It trades about 0.1 of its potential returns per unit of risk. Shunfeng International Clean is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.10  in Shunfeng International Clean on July 19, 2025 and sell it today you would earn a total of  0.10  from holding Shunfeng International Clean or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

DOCDATA  vs.  Shunfeng International Clean

DOCDATA

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in DOCDATA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, DOCDATA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Shunfeng International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shunfeng International Clean are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Shunfeng International reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DOCDATA and Shunfeng International

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

The idea behind DOCDATA and Shunfeng International Clean 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.