Correlation Between Tongyu Communication and Shandong Mining
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By analyzing existing cross correlation between Tongyu Communication and Shandong Mining Machinery, you can compare the effects of market volatilities on Tongyu Communication and Shandong Mining 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 Shandong Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Shandong Mining.
Diversification Opportunities for Tongyu Communication and Shandong Mining
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tongyu and Shandong is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Shandong Mining Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Mining Machinery 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 Shandong Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Mining Machinery has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Shandong Mining go up and down completely randomly.
Pair Corralation between Tongyu Communication and Shandong Mining
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.47 times more return on investment than Shandong Mining. However, Tongyu Communication is 1.47 times more volatile than Shandong Mining Machinery. It trades about 0.06 of its potential returns per unit of risk. Shandong Mining Machinery is currently generating about 0.02 per unit of risk. If you would invest 866.00 in Tongyu Communication on August 29, 2024 and sell it today you would earn a total of 844.00 from holding Tongyu Communication or generate 97.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Shandong Mining Machinery
Performance |
| Timeline |
| Tongyu Communication |
| Shandong Mining Machinery |
Tongyu Communication and Shandong Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Shandong Mining
The main advantage of trading using opposite Tongyu Communication and Shandong Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Shandong Mining 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 Shandong Mining will offset losses from the drop in Shandong Mining'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 |
| Shandong Mining vs. Runjian Communication Co | Shandong Mining vs. GreenTech Environmental Co | Shandong Mining vs. Tongyu Communication | Shandong Mining vs. Guangzhou Haige Communications |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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