Correlation Between Tongyu Communication and Hongrun Construction
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By analyzing existing cross correlation between Tongyu Communication and Hongrun Construction Group, you can compare the effects of market volatilities on Tongyu Communication 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 Tongyu Communication with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Hongrun Construction.
Diversification Opportunities for Tongyu Communication and Hongrun Construction
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tongyu and Hongrun is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun 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 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 Tongyu Communication i.e., Tongyu Communication and Hongrun Construction go up and down completely randomly.
Pair Corralation between Tongyu Communication and Hongrun Construction
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.76 times more return on investment than Hongrun Construction. However, Tongyu Communication is 1.76 times more volatile than Hongrun Construction Group. It trades about 0.2 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.12 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. Hongrun Construction Group
Performance |
| Timeline |
| Tongyu Communication |
| Hongrun Construction |
Tongyu Communication and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Hongrun Construction
The main advantage of trading using opposite Tongyu Communication and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication 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.| Tongyu Communication vs. Shenzhen MYS Environmental | Tongyu Communication vs. AVIC Fund Management | Tongyu Communication vs. Shenzhen Bingchuan Network | Tongyu Communication vs. Penghua Shenzhen Energy |
| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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