Correlation Between Hongrun Construction and Shanghai AtHub
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By analyzing existing cross correlation between Hongrun Construction Group and Shanghai AtHub Co, you can compare the effects of market volatilities on Hongrun Construction and Shanghai AtHub 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 Shanghai AtHub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Shanghai AtHub.
Diversification Opportunities for Hongrun Construction and Shanghai AtHub
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hongrun and Shanghai is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Shanghai AtHub Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai AtHub 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 Shanghai AtHub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai AtHub has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Shanghai AtHub go up and down completely randomly.
Pair Corralation between Hongrun Construction and Shanghai AtHub
Assuming the 90 days trading horizon Hongrun Construction is expected to generate 30.54 times less return on investment than Shanghai AtHub. But when comparing it to its historical volatility, Hongrun Construction Group is 1.91 times less risky than Shanghai AtHub. It trades about 0.02 of its potential returns per unit of risk. Shanghai AtHub Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,765 in Shanghai AtHub Co on November 7, 2024 and sell it today you would earn a total of 419.00 from holding Shanghai AtHub Co or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Shanghai AtHub Co
Performance |
| Timeline |
| Hongrun Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Shanghai AtHub |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Hongrun Construction and Shanghai AtHub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Shanghai AtHub
The main advantage of trading using opposite Hongrun Construction and Shanghai AtHub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Shanghai AtHub 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 Shanghai AtHub will offset losses from the drop in Shanghai AtHub's long position.The idea behind Hongrun Construction Group and Shanghai AtHub Co 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.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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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