Correlation Between Guangzhou Haige and Hongrun Construction
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By analyzing existing cross correlation between Guangzhou Haige Communications and Hongrun Construction Group, you can compare the effects of market volatilities on Guangzhou Haige 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 Guangzhou Haige with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Haige and Hongrun Construction.
Diversification Opportunities for Guangzhou Haige and Hongrun Construction
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guangzhou and Hongrun is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Haige Communications and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Guangzhou Haige 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 Guangzhou Haige Communications 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 Guangzhou Haige i.e., Guangzhou Haige and Hongrun Construction go up and down completely randomly.
Pair Corralation between Guangzhou Haige and Hongrun Construction
Assuming the 90 days trading horizon Guangzhou Haige Communications is expected to generate 1.26 times more return on investment than Hongrun Construction. However, Guangzhou Haige is 1.26 times more volatile than Hongrun Construction Group. It trades about 0.26 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 1,019 in Guangzhou Haige Communications on November 8, 2024 and sell it today you would earn a total of 120.00 from holding Guangzhou Haige Communications or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangzhou Haige Communications vs. Hongrun Construction Group
Performance |
| Timeline |
| Guangzhou Haige Comm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hongrun Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Guangzhou Haige and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangzhou Haige and Hongrun Construction
The main advantage of trading using opposite Guangzhou Haige and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Haige 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.The idea behind Guangzhou Haige Communications and Hongrun Construction Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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