Correlation Between Shenzhen MYS and Tongyu Communication
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By analyzing existing cross correlation between Shenzhen MYS Environmental and Tongyu Communication, you can compare the effects of market volatilities on Shenzhen MYS and Tongyu Communication 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 Shenzhen MYS with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen MYS and Tongyu Communication.
Diversification Opportunities for Shenzhen MYS and Tongyu Communication
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Tongyu is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen MYS Environmental and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication and Shenzhen MYS 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 Shenzhen MYS Environmental are associated (or correlated) with Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of Shenzhen MYS i.e., Shenzhen MYS and Tongyu Communication go up and down completely randomly.
Pair Corralation between Shenzhen MYS and Tongyu Communication
Assuming the 90 days trading horizon Shenzhen MYS is expected to generate 2.87 times less return on investment than Tongyu Communication. But when comparing it to its historical volatility, Shenzhen MYS Environmental is 1.68 times less risky than Tongyu Communication. It trades about 0.03 of its potential returns per unit of risk. Tongyu Communication is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 856.00 in Tongyu Communication on August 30, 2024 and sell it today you would earn a total of 851.00 from holding Tongyu Communication or generate 99.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen MYS Environmental vs. Tongyu Communication
Performance |
| Timeline |
| Shenzhen MYS Environ |
| Tongyu Communication |
Shenzhen MYS and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen MYS and Tongyu Communication
The main advantage of trading using opposite Shenzhen MYS and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen MYS position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| Shenzhen MYS vs. Shandong Gold Mining | Shenzhen MYS vs. Rongsheng Petrochemical Co | Shenzhen MYS vs. Inner Mongolia BaoTou | Shenzhen MYS vs. Jiangxi Ganfeng Lithium |
| Tongyu Communication vs. China State Construction | Tongyu Communication vs. Huafa Industrial Co | Tongyu Communication vs. China International Capital | Tongyu Communication vs. Kweichow Moutai 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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