Correlation Between Changchun and Runjian Communication
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By analyzing existing cross correlation between Changchun UP Optotech and Runjian Communication Co, you can compare the effects of market volatilities on Changchun and Runjian 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 Changchun with a short position of Runjian Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun and Runjian Communication.
Diversification Opportunities for Changchun and Runjian Communication
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Runjian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Changchun UP Optotech and Runjian Communication Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Runjian Communication and Changchun 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 Changchun UP Optotech are associated (or correlated) with Runjian Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Runjian Communication has no effect on the direction of Changchun i.e., Changchun and Runjian Communication go up and down completely randomly.
Pair Corralation between Changchun and Runjian Communication
Assuming the 90 days trading horizon Changchun UP Optotech is expected to generate 2.09 times more return on investment than Runjian Communication. However, Changchun is 2.09 times more volatile than Runjian Communication Co. It trades about 0.16 of its potential returns per unit of risk. Runjian Communication Co is currently generating about -0.05 per unit of risk. If you would invest 3,581 in Changchun UP Optotech on August 25, 2024 and sell it today you would earn a total of 595.00 from holding Changchun UP Optotech or generate 16.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun UP Optotech vs. Runjian Communication Co
Performance |
| Timeline |
| Changchun UP Optotech |
| Runjian Communication |
Changchun and Runjian Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun and Runjian Communication
The main advantage of trading using opposite Changchun and Runjian Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun position performs unexpectedly, Runjian 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 Runjian Communication will offset losses from the drop in Runjian Communication's long position.| Changchun vs. Chengdu Kanghua Biological | Changchun vs. Beijing Wantai Biological | Changchun vs. Suzhou Novoprotein Scientific | Changchun vs. Aluminum Corp of |
| Runjian Communication vs. Industrial and Commercial | Runjian Communication vs. Agricultural Bank of | Runjian Communication vs. China Construction Bank | Runjian Communication vs. Bank of China |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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