Correlation Between Tongyu Communication and CICC Fund
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By analyzing existing cross correlation between Tongyu Communication and CICC Fund Management, you can compare the effects of market volatilities on Tongyu Communication and CICC Fund 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 CICC Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and CICC Fund.
Diversification Opportunities for Tongyu Communication and CICC Fund
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tongyu and CICC is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and CICC Fund Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICC Fund Management 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 CICC Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICC Fund Management has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and CICC Fund go up and down completely randomly.
Pair Corralation between Tongyu Communication and CICC Fund
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 3.9 times more return on investment than CICC Fund. However, Tongyu Communication is 3.9 times more volatile than CICC Fund Management. It trades about 0.05 of its potential returns per unit of risk. CICC Fund Management is currently generating about 0.2 per unit of risk. If you would invest 1,086 in Tongyu Communication on October 22, 2024 and sell it today you would earn a total of 380.00 from holding Tongyu Communication or generate 34.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. CICC Fund Management
Performance |
| Timeline |
| Tongyu Communication |
| CICC Fund Management |
Tongyu Communication and CICC Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and CICC Fund
The main advantage of trading using opposite Tongyu Communication and CICC Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, CICC Fund 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 CICC Fund will offset losses from the drop in CICC Fund's long position.The idea behind Tongyu Communication and CICC Fund Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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