Correlation Between Hongrun Construction and Shantui Construction
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By analyzing existing cross correlation between Hongrun Construction Group and Shantui Construction Machinery, you can compare the effects of market volatilities on Hongrun Construction and Shantui 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 Hongrun Construction with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Shantui Construction.
Diversification Opportunities for Hongrun Construction and Shantui Construction
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongrun and Shantui is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Hongrun Construction 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 Hongrun Construction Group are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Shantui Construction go up and down completely randomly.
Pair Corralation between Hongrun Construction and Shantui Construction
Assuming the 90 days trading horizon Hongrun Construction Group is expected to under-perform the Shantui Construction. But the stock apears to be less risky and, when comparing its historical volatility, Hongrun Construction Group is 1.3 times less risky than Shantui Construction. The stock trades about -0.01 of its potential returns per unit of risk. The Shantui Construction Machinery is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 438.00 in Shantui Construction Machinery on August 29, 2024 and sell it today you would earn a total of 576.00 from holding Shantui Construction Machinery or generate 131.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Shantui Construction Machinery
Performance |
| Timeline |
| Hongrun Construction |
| Shantui Construction |
Hongrun Construction and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Shantui Construction
The main advantage of trading using opposite Hongrun Construction and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Shantui 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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