Correlation Between Hongrun Construction and Mengtian Home
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By analyzing existing cross correlation between Hongrun Construction Group and Mengtian Home Group, you can compare the effects of market volatilities on Hongrun Construction and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Mengtian Home.
Diversification Opportunities for Hongrun Construction and Mengtian Home
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hongrun and Mengtian is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Mengtian Home go up and down completely randomly.
Pair Corralation between Hongrun Construction and Mengtian Home
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 0.81 times more return on investment than Mengtian Home. However, Hongrun Construction Group is 1.24 times less risky than Mengtian Home. It trades about 0.05 of its potential returns per unit of risk. Mengtian Home Group is currently generating about -0.01 per unit of risk. If you would invest 415.00 in Hongrun Construction Group on October 14, 2024 and sell it today you would earn a total of 109.00 from holding Hongrun Construction Group or generate 26.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Mengtian Home Group
Performance |
| Timeline |
| Hongrun Construction |
| Mengtian Home Group |
Hongrun Construction and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Mengtian Home
The main advantage of trading using opposite Hongrun Construction and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| Hongrun Construction vs. Quectel Wireless Solutions | Hongrun Construction vs. Fibocom Wireless | Hongrun Construction vs. Hangzhou Arcvideo Technology | Hongrun Construction vs. Songz Automobile Air |
| Mengtian Home vs. Anhui Shiny Electronic | Mengtian Home vs. Harvest Fund Management | Mengtian Home vs. Beijing YanDong MicroElectronic | Mengtian Home vs. Cicc Fund Management |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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