Correlation Between Hongrun Construction and Zotye Automobile
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By analyzing existing cross correlation between Hongrun Construction Group and Zotye Automobile Co, you can compare the effects of market volatilities on Hongrun Construction and Zotye Automobile 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 Zotye Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Zotye Automobile.
Diversification Opportunities for Hongrun Construction and Zotye Automobile
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongrun and Zotye is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Zotye Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zotye Automobile 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 Zotye Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zotye Automobile has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Zotye Automobile go up and down completely randomly.
Pair Corralation between Hongrun Construction and Zotye Automobile
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 0.55 times more return on investment than Zotye Automobile. However, Hongrun Construction Group is 1.82 times less risky than Zotye Automobile. It trades about -0.01 of its potential returns per unit of risk. Zotye Automobile Co is currently generating about -0.03 per unit of risk. If you would invest 537.00 in Hongrun Construction Group on August 29, 2024 and sell it today you would lose (101.00) from holding Hongrun Construction Group or give up 18.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Zotye Automobile Co
Performance |
| Timeline |
| Hongrun Construction |
| Zotye Automobile |
Hongrun Construction and Zotye Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Zotye Automobile
The main advantage of trading using opposite Hongrun Construction and Zotye Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Zotye Automobile 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 Zotye Automobile will offset losses from the drop in Zotye Automobile's long position.| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
| Zotye Automobile vs. Caihong Display Devices | Zotye Automobile vs. Sinomach Automobile Co | Zotye Automobile vs. Lander Sports Development | Zotye Automobile vs. Songz Automobile Air |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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