Correlation Between Hongrun Construction and Xinhua Winshare
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By analyzing existing cross correlation between Hongrun Construction Group and Xinhua Winshare Publishing, you can compare the effects of market volatilities on Hongrun Construction and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Xinhua Winshare.
Diversification Opportunities for Hongrun Construction and Xinhua Winshare
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hongrun and Xinhua is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Hongrun Construction and Xinhua Winshare
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 1.17 times more return on investment than Xinhua Winshare. However, Hongrun Construction is 1.17 times more volatile than Xinhua Winshare Publishing. It trades about 0.04 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.03 per unit of risk. If you would invest 439.00 in Hongrun Construction Group on October 30, 2024 and sell it today you would earn a total of 73.00 from holding Hongrun Construction Group or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Hongrun Construction |
| Xinhua Winshare Publ |
Hongrun Construction and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Xinhua Winshare
The main advantage of trading using opposite Hongrun Construction and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Hongrun Construction vs. Industrial and Commercial | Hongrun Construction vs. China Construction Bank | Hongrun Construction vs. Agricultural Bank of | Hongrun Construction vs. Bank of China |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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