Correlation Between Tongyu Communication and Sinomach Automobile
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By analyzing existing cross correlation between Tongyu Communication and Sinomach Automobile Co, you can compare the effects of market volatilities on Tongyu Communication and Sinomach Automobile 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 Sinomach Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Sinomach Automobile.
Diversification Opportunities for Tongyu Communication and Sinomach Automobile
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongyu and Sinomach is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Sinomach Automobile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinomach Automobile 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 Sinomach Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinomach Automobile has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Sinomach Automobile go up and down completely randomly.
Pair Corralation between Tongyu Communication and Sinomach Automobile
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.26 times more return on investment than Sinomach Automobile. However, Tongyu Communication is 1.26 times more volatile than Sinomach Automobile Co. It trades about 0.04 of its potential returns per unit of risk. Sinomach Automobile Co is currently generating about -0.02 per unit of risk. If you would invest 881.00 in Tongyu Communication on October 11, 2024 and sell it today you would earn a total of 501.00 from holding Tongyu Communication or generate 56.87% 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. Sinomach Automobile Co
Performance |
| Timeline |
| Tongyu Communication |
| Sinomach Automobile |
Tongyu Communication and Sinomach Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Sinomach Automobile
The main advantage of trading using opposite Tongyu Communication and Sinomach Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Sinomach Automobile 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 Sinomach Automobile will offset losses from the drop in Sinomach Automobile's long position.| Tongyu Communication vs. XiaMen HongXin Electron tech | Tongyu Communication vs. Digiwin Software Co | Tongyu Communication vs. Xizi Clean Energy | Tongyu Communication vs. Sinofibers Technology Co |
| Sinomach Automobile vs. Wuhan Yangtze Communication | Sinomach Automobile vs. Do Fluoride Chemicals Co | Sinomach Automobile vs. Tongyu Communication | Sinomach Automobile vs. MayAir Technology Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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