Correlation Between Tongyu Communication and Shantui Construction
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By analyzing existing cross correlation between Tongyu Communication and Shantui Construction Machinery, you can compare the effects of market volatilities on Tongyu Communication and Shantui 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 Tongyu Communication with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Shantui Construction.
Diversification Opportunities for Tongyu Communication and Shantui Construction
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tongyu and Shantui is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction 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 Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Shantui Construction go up and down completely randomly.
Pair Corralation between Tongyu Communication and Shantui Construction
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.61 times more return on investment than Shantui Construction. However, Tongyu Communication is 1.61 times more volatile than Shantui Construction Machinery. It trades about 0.2 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.27 per unit of risk. If you would invest 1,390 in Tongyu Communication on August 29, 2024 and sell it today you would earn a total of 320.00 from holding Tongyu Communication or generate 23.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Shantui Construction Machinery
Performance |
| Timeline |
| Tongyu Communication |
| Shantui Construction |
Tongyu Communication and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Shantui Construction
The main advantage of trading using opposite Tongyu Communication and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Shantui 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Tongyu Communication vs. Shenzhen MYS Environmental | Tongyu Communication vs. AVIC Fund Management | Tongyu Communication vs. Shenzhen Bingchuan Network | Tongyu Communication vs. Penghua Shenzhen Energy |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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