Correlation Between Hongrun Construction and Harbin Air
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By analyzing existing cross correlation between Hongrun Construction Group and Harbin Air Conditioning, you can compare the effects of market volatilities on Hongrun Construction and Harbin Air 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 Harbin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Harbin Air.
Diversification Opportunities for Hongrun Construction and Harbin Air
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongrun and Harbin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Harbin Air Conditioning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbin Air Conditioning 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 Harbin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbin Air Conditioning has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Harbin Air go up and down completely randomly.
Pair Corralation between Hongrun Construction and Harbin Air
Assuming the 90 days trading horizon Hongrun Construction is expected to generate 1.48 times less return on investment than Harbin Air. In addition to that, Hongrun Construction is 1.16 times more volatile than Harbin Air Conditioning. It trades about 0.14 of its total potential returns per unit of risk. Harbin Air Conditioning is currently generating about 0.23 per unit of volatility. If you would invest 484.00 in Harbin Air Conditioning on September 13, 2024 and sell it today you would earn a total of 54.00 from holding Harbin Air Conditioning or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hongrun Construction Group vs. Harbin Air Conditioning
Performance |
| Timeline |
| Hongrun Construction |
| Harbin Air Conditioning |
Hongrun Construction and Harbin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Harbin Air
The main advantage of trading using opposite Hongrun Construction and Harbin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Harbin Air 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 Harbin Air will offset losses from the drop in Harbin Air's long position.The idea behind Hongrun Construction Group and Harbin Air Conditioning 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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