Correlation Between Zhongshan Broad and Hongrun Construction
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By analyzing existing cross correlation between Zhongshan Broad Ocean Motor and Hongrun Construction Group, you can compare the effects of market volatilities on Zhongshan Broad and Hongrun Construction 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 Zhongshan Broad with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongshan Broad and Hongrun Construction.
Diversification Opportunities for Zhongshan Broad and Hongrun Construction
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhongshan and Hongrun is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Zhongshan Broad Ocean Motor and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Zhongshan Broad 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 Zhongshan Broad Ocean Motor are associated (or correlated) with Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Zhongshan Broad i.e., Zhongshan Broad and Hongrun Construction go up and down completely randomly.
Pair Corralation between Zhongshan Broad and Hongrun Construction
Assuming the 90 days trading horizon Zhongshan Broad Ocean Motor is expected to generate 0.84 times more return on investment than Hongrun Construction. However, Zhongshan Broad Ocean Motor is 1.19 times less risky than Hongrun Construction. It trades about 0.02 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.01 per unit of risk. If you would invest 508.00 in Zhongshan Broad Ocean Motor on October 11, 2024 and sell it today you would earn a total of 48.00 from holding Zhongshan Broad Ocean Motor or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongshan Broad Ocean Motor vs. Hongrun Construction Group
Performance |
| Timeline |
| Zhongshan Broad Ocean |
| Hongrun Construction |
Zhongshan Broad and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongshan Broad and Hongrun Construction
The main advantage of trading using opposite Zhongshan Broad and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongshan Broad position performs unexpectedly, Hongrun Construction 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| Zhongshan Broad vs. HUAQIN TECHNOLOGY LTD | Zhongshan Broad vs. Hangzhou Arcvideo Technology | Zhongshan Broad vs. Linktel Technologies Co | Zhongshan Broad vs. INKON Life Technology |
| Hongrun Construction vs. Aba Chemicals Corp | Hongrun Construction vs. Hunan TV Broadcast | Hongrun Construction vs. Zhongshan Broad Ocean Motor | Hongrun Construction vs. Chongqing Road Bridge |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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