Correlation Between Gansu Huangtai and Hongrun Construction
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By analyzing existing cross correlation between Gansu Huangtai Wine marketing and Hongrun Construction Group, you can compare the effects of market volatilities on Gansu Huangtai 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 Gansu Huangtai with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gansu Huangtai and Hongrun Construction.
Diversification Opportunities for Gansu Huangtai and Hongrun Construction
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gansu and Hongrun is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gansu Huangtai Wine marketing and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Gansu Huangtai 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 Gansu Huangtai Wine marketing 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 Gansu Huangtai i.e., Gansu Huangtai and Hongrun Construction go up and down completely randomly.
Pair Corralation between Gansu Huangtai and Hongrun Construction
Assuming the 90 days trading horizon Gansu Huangtai is expected to generate 1.31 times less return on investment than Hongrun Construction. In addition to that, Gansu Huangtai is 1.64 times more volatile than Hongrun Construction Group. It trades about 0.07 of its total potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.15 per unit of volatility. If you would invest 446.00 in Hongrun Construction Group on October 12, 2024 and sell it today you would earn a total of 78.00 from holding Hongrun Construction Group or generate 17.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gansu Huangtai Wine marketing vs. Hongrun Construction Group
Performance |
| Timeline |
| Gansu Huangtai Wine |
| Hongrun Construction |
Gansu Huangtai and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gansu Huangtai and Hongrun Construction
The main advantage of trading using opposite Gansu Huangtai and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gansu Huangtai 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.| Gansu Huangtai vs. Anhui Tongguan Copper | Gansu Huangtai vs. Qingdao Foods Co | Gansu Huangtai vs. Shanghai Yanpu Metal | Gansu Huangtai vs. Dalian Thermal Power |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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