Correlation Between Tongyu Communication and Maoming Petro
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By analyzing existing cross correlation between Tongyu Communication and Maoming Petro Chemical Shihua, you can compare the effects of market volatilities on Tongyu Communication and Maoming Petro 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 Tongyu Communication with a short position of Maoming Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Maoming Petro.
Diversification Opportunities for Tongyu Communication and Maoming Petro
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongyu and Maoming is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Maoming Petro Chemical Shihua in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maoming Petro Chemical and Tongyu Communication 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 Tongyu Communication are associated (or correlated) with Maoming Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maoming Petro Chemical has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Maoming Petro go up and down completely randomly.
Pair Corralation between Tongyu Communication and Maoming Petro
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.6 times more return on investment than Maoming Petro. However, Tongyu Communication is 1.6 times more volatile than Maoming Petro Chemical Shihua. It trades about 0.04 of its potential returns per unit of risk. Maoming Petro Chemical Shihua is currently generating about -0.03 per unit of risk. If you would invest 887.00 in Tongyu Communication on October 14, 2024 and sell it today you would earn a total of 500.00 from holding Tongyu Communication or generate 56.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Maoming Petro Chemical Shihua
Performance |
| Timeline |
| Tongyu Communication |
| Maoming Petro Chemical |
Tongyu Communication and Maoming Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Maoming Petro
The main advantage of trading using opposite Tongyu Communication and Maoming Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Maoming Petro 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 Maoming Petro will offset losses from the drop in Maoming Petro's long position.| Tongyu Communication vs. Ingenic Semiconductor | Tongyu Communication vs. StarPower Semiconductor | Tongyu Communication vs. Beijing Jiaman Dress | Tongyu Communication vs. Nexchip Semiconductor Corp |
| Maoming Petro vs. Guangzhou Haige Communications | Maoming Petro vs. Fuda Alloy Materials | Maoming Petro vs. Tongyu Communication | Maoming Petro vs. China Building Material |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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