Correlation Between Tongyu Communication and China Railway
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By analyzing existing cross correlation between Tongyu Communication and China Railway Group, you can compare the effects of market volatilities on Tongyu Communication and China Railway 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 China Railway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and China Railway.
Diversification Opportunities for Tongyu Communication and China Railway
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tongyu and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and China Railway Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Railway Group 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 China Railway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Railway Group has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and China Railway go up and down completely randomly.
Pair Corralation between Tongyu Communication and China Railway
Assuming the 90 days trading horizon Tongyu Communication is expected to under-perform the China Railway. In addition to that, Tongyu Communication is 1.53 times more volatile than China Railway Group. It trades about -0.38 of its total potential returns per unit of risk. China Railway Group is currently generating about 0.11 per unit of volatility. If you would invest 638.00 in China Railway Group on September 27, 2024 and sell it today you would earn a total of 15.00 from holding China Railway Group or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. China Railway Group
Performance |
| Timeline |
| Tongyu Communication |
| China Railway Group |
Tongyu Communication and China Railway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and China Railway
The main advantage of trading using opposite Tongyu Communication and China Railway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, China Railway 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 China Railway will offset losses from the drop in China Railway's long position.| Tongyu Communication vs. Industrial and Commercial | Tongyu Communication vs. Agricultural Bank of | Tongyu Communication vs. China Construction Bank | Tongyu Communication vs. Bank of China |
| China Railway vs. Fuzhou Rockchip Electronics | China Railway vs. Tongyu Communication | China Railway vs. Wintao Communications Co | China Railway vs. Unigroup Guoxin Microelectronics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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