Correlation Between Hongrun Construction and Long Yuan
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By analyzing existing cross correlation between Hongrun Construction Group and Long Yuan Construction, you can compare the effects of market volatilities on Hongrun Construction and Long Yuan 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 Long Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Long Yuan.
Diversification Opportunities for Hongrun Construction and Long Yuan
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hongrun and Long is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Long Yuan Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Long Yuan 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 Long Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Long Yuan Construction has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Long Yuan go up and down completely randomly.
Pair Corralation between Hongrun Construction and Long Yuan
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 0.88 times more return on investment than Long Yuan. However, Hongrun Construction Group is 1.14 times less risky than Long Yuan. It trades about 0.12 of its potential returns per unit of risk. Long Yuan Construction is currently generating about -0.1 per unit of risk. If you would invest 406.00 in Hongrun Construction Group on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Hongrun Construction Group or generate 7.39% 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. Long Yuan Construction
Performance |
| Timeline |
| Hongrun Construction |
| Long Yuan Construction |
Hongrun Construction and Long Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Long Yuan
The main advantage of trading using opposite Hongrun Construction and Long Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Long Yuan 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 Long Yuan will offset losses from the drop in Long Yuan's long position.| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
| Long Yuan vs. Ming Yang Smart | Long Yuan vs. 159681 | Long Yuan vs. 159005 | Long Yuan 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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