Correlation Between Hongrun Construction and China Railway
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By analyzing existing cross correlation between Hongrun Construction Group and China Railway Construction, you can compare the effects of market volatilities on Hongrun Construction and China Railway 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 Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and China Railway.
Diversification Opportunities for Hongrun Construction and China Railway
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hongrun and China is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and China Railway Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Constr 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 Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Constr has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and China Railway go up and down completely randomly.
Pair Corralation between Hongrun Construction and China Railway
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 1.04 times more return on investment than China Railway. However, Hongrun Construction is 1.04 times more volatile than China Railway Construction. It trades about 0.0 of its potential returns per unit of risk. China Railway Construction is currently generating about 0.0 per unit of risk. If you would invest 516.00 in Hongrun Construction Group on August 31, 2024 and sell it today you would lose (51.00) from holding Hongrun Construction Group or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. China Railway Construction
Performance |
| Timeline |
| Hongrun Construction |
| China Railway Constr |
Hongrun Construction and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and China Railway
The main advantage of trading using opposite Hongrun Construction and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, China Railway 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 Railway will offset losses from the drop in China Railway's long position.| Hongrun Construction vs. Cultural Investment Holdings | Hongrun Construction vs. Gome Telecom Equipment | Hongrun Construction vs. Bus Online Co | Hongrun Construction vs. Holitech Technology Co |
| China Railway vs. Cultural Investment Holdings | China Railway vs. Gome Telecom Equipment | China Railway vs. Bus Online Co | China Railway vs. Holitech Technology Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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