Correlation Between Hongrun Construction and China Securities
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By analyzing existing cross correlation between Hongrun Construction Group and China Securities 800, you can compare the effects of market volatilities on Hongrun Construction and China Securities 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 China Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and China Securities.
Diversification Opportunities for Hongrun Construction and China Securities
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hongrun and China is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and China Securities 800 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Securities 800 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 China Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Securities 800 has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and China Securities go up and down completely randomly.
Pair Corralation between Hongrun Construction and China Securities
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 1.83 times more return on investment than China Securities. However, Hongrun Construction is 1.83 times more volatile than China Securities 800. It trades about 0.01 of its potential returns per unit of risk. China Securities 800 is currently generating about -0.02 per unit of risk. If you would invest 522.00 in Hongrun Construction Group on October 16, 2024 and sell it today you would lose (5.00) from holding Hongrun Construction Group or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. China Securities 800
Performance |
| Timeline |
Hongrun Construction and China Securities Volatility Contrast
Predicted Return Density |
| Returns |
Hongrun Construction Group
Pair trading matchups for Hongrun Construction
China Securities 800
Pair trading matchups for China Securities
Pair Trading with Hongrun Construction and China Securities
The main advantage of trading using opposite Hongrun Construction and China Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, China Securities 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 China Securities will offset losses from the drop in China Securities' long position.The idea behind Hongrun Construction Group and China Securities 800 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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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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