Correlation Between China Securities and Hongrun Construction
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By analyzing existing cross correlation between China Securities 800 and Hongrun Construction Group, you can compare the effects of market volatilities on China Securities and Hongrun Construction 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 China Securities with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and Hongrun Construction.
Diversification Opportunities for China Securities and Hongrun Construction
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Hongrun is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and China Securities 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 China Securities 800 are associated (or correlated) with Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of China Securities i.e., China Securities and Hongrun Construction go up and down completely randomly.
Pair Corralation between China Securities and Hongrun Construction
Assuming the 90 days trading horizon China Securities 800 is expected to under-perform the Hongrun Construction. But the index apears to be less risky and, when comparing its historical volatility, China Securities 800 is 2.24 times less risky than Hongrun Construction. The index trades about -0.11 of its potential returns per unit of risk. The Hongrun Construction Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Hongrun Construction Group on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Hongrun Construction Group or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Securities 800 vs. Hongrun Construction Group
Performance |
| Timeline |
China Securities and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
Hongrun Construction Group
Pair trading matchups for Hongrun Construction
Pair Trading with China Securities and Hongrun Construction
The main advantage of trading using opposite China Securities and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, Hongrun Construction 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| China Securities vs. Shandong Ruifeng Chemical | China Securities vs. Zhongtong Guomai Communication | China Securities vs. Gome Telecom Equipment | China Securities vs. Dymatic Chemicals |
| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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