Correlation Between Tongyu Communication and Hua Xia
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By analyzing existing cross correlation between Tongyu Communication and Hua Xia Bank, you can compare the effects of market volatilities on Tongyu Communication and Hua Xia 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 Hua Xia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Hua Xia.
Diversification Opportunities for Tongyu Communication and Hua Xia
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tongyu and Hua is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Hua Xia Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hua Xia Bank 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 Hua Xia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hua Xia Bank has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Hua Xia go up and down completely randomly.
Pair Corralation between Tongyu Communication and Hua Xia
Assuming the 90 days trading horizon Tongyu Communication is expected to under-perform the Hua Xia. In addition to that, Tongyu Communication is 2.64 times more volatile than Hua Xia Bank. It trades about -0.21 of its total potential returns per unit of risk. Hua Xia Bank is currently generating about -0.19 per unit of volatility. If you would invest 778.00 in Hua Xia Bank on October 16, 2024 and sell it today you would lose (35.00) from holding Hua Xia Bank or give up 4.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Hua Xia Bank
Performance |
| Timeline |
| Tongyu Communication |
| Hua Xia Bank |
Tongyu Communication and Hua Xia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Hua Xia
The main advantage of trading using opposite Tongyu Communication and Hua Xia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Hua Xia 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 Hua Xia will offset losses from the drop in Hua Xia's long position.| Tongyu Communication vs. Guangdong Jingyi Metal | Tongyu Communication vs. Chengtun Mining Group | Tongyu Communication vs. Western Metal Materials | Tongyu Communication vs. Shanghai Broadband Technology |
| Hua Xia vs. Beijing Bewinner Communications | Hua Xia vs. Tongyu Communication | Hua Xia vs. Bus Online Co | Hua Xia 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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