Correlation Between Tongyu Communication and Shandong Rike
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By analyzing existing cross correlation between Tongyu Communication and Shandong Rike Chemical, you can compare the effects of market volatilities on Tongyu Communication and Shandong Rike 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 Rike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Shandong Rike.
Diversification Opportunities for Tongyu Communication and Shandong Rike
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongyu and Shandong is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Shandong Rike Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Rike 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 Shandong Rike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Rike Chemical has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Shandong Rike go up and down completely randomly.
Pair Corralation between Tongyu Communication and Shandong Rike
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.06 times more return on investment than Shandong Rike. However, Tongyu Communication is 1.06 times more volatile than Shandong Rike Chemical. It trades about 0.11 of its potential returns per unit of risk. Shandong Rike Chemical is currently generating about 0.11 per unit of risk. If you would invest 1,063 in Tongyu Communication on October 18, 2024 and sell it today you would earn a total of 332.00 from holding Tongyu Communication or generate 31.23% 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. Shandong Rike Chemical
Performance |
| Timeline |
| Tongyu Communication |
| Shandong Rike Chemical |
Tongyu Communication and Shandong Rike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Shandong Rike
The main advantage of trading using opposite Tongyu Communication and Shandong Rike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Shandong Rike 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 Rike will offset losses from the drop in Shandong Rike's long position.| Tongyu Communication vs. Rising Nonferrous Metals | Tongyu Communication vs. Offshore Oil Engineering | Tongyu Communication vs. Jiangxi Naipu Mining | Tongyu Communication vs. Zhejiang Kingland Pipeline |
| Shandong Rike vs. Guizhou BroadcastingTV Info | Shandong Rike vs. Sichuan Fulin Transportation | Shandong Rike vs. Hunan TV Broadcast | Shandong Rike vs. Tongyu Communication |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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