Correlation Between Hongrun Construction and Zhejiang Yongjin
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By analyzing existing cross correlation between Hongrun Construction Group and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Hongrun Construction and Zhejiang Yongjin 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 Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongrun Construction and Zhejiang Yongjin.
Diversification Opportunities for Hongrun Construction and Zhejiang Yongjin
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hongrun and Zhejiang is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hongrun Construction Group and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal 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 Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Hongrun Construction i.e., Hongrun Construction and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Hongrun Construction and Zhejiang Yongjin
Assuming the 90 days trading horizon Hongrun Construction Group is expected to generate 1.75 times more return on investment than Zhejiang Yongjin. However, Hongrun Construction is 1.75 times more volatile than Zhejiang Yongjin Metal. It trades about 0.18 of its potential returns per unit of risk. Zhejiang Yongjin Metal is currently generating about -0.09 per unit of risk. If you would invest 465.00 in Hongrun Construction Group on October 18, 2024 and sell it today you would earn a total of 46.00 from holding Hongrun Construction Group or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongrun Construction Group vs. Zhejiang Yongjin Metal
Performance |
| Timeline |
| Hongrun Construction |
| Zhejiang Yongjin Metal |
Hongrun Construction and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongrun Construction and Zhejiang Yongjin
The main advantage of trading using opposite Hongrun Construction and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongrun Construction position performs unexpectedly, Zhejiang Yongjin 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 Zhejiang Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.The idea behind Hongrun Construction Group and Zhejiang Yongjin Metal 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.
| Zhejiang Yongjin vs. Hongrun Construction Group | Zhejiang Yongjin vs. Anhui Huilong Agricultural | Zhejiang Yongjin vs. Masterwork Machinery | Zhejiang Yongjin vs. Lutian Machinery 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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