Correlation Between Hongrun Construction and Masterwork Machinery
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By analyzing existing cross correlation between Hongrun Construction Group and Masterwork Machinery, you can compare the effects of market volatilities on Hongrun Construction and Masterwork Machinery 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Masterwork Machinery.
Diversification Opportunities for Hongrun Construction and Masterwork Machinery
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongrun and Masterwork is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork Machinery 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Masterwork Machinery go up and down completely randomly.
Pair Corralation between Hongrun Construction and Masterwork Machinery
Assuming the 90 days trading horizon Hongrun Construction Group is expected to under-perform the Masterwork Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Hongrun Construction Group is 1.43 times less risky than Masterwork Machinery. The stock trades about -0.01 of its potential returns per unit of risk. The Masterwork Machinery is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Masterwork Machinery on August 25, 2024 and sell it today you would earn a total of 32.00 from holding Masterwork Machinery or generate 5.48% 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. Masterwork Machinery
Performance |
| Timeline |
| Hongrun Construction |
| Masterwork Machinery |
Hongrun Construction and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Masterwork Machinery
The main advantage of trading using opposite Hongrun Construction and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Masterwork Machinery 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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