Correlation Between Tongyu Communication and China Construction
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By analyzing existing cross correlation between Tongyu Communication and China Construction Bank, you can compare the effects of market volatilities on Tongyu Communication and China Construction 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 Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and China Construction.
Diversification Opportunities for Tongyu Communication and China Construction
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tongyu and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction 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 China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and China Construction go up and down completely randomly.
Pair Corralation between Tongyu Communication and China Construction
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 8.56 times less return on investment than China Construction. In addition to that, Tongyu Communication is 4.46 times more volatile than China Construction Bank. It trades about 0.01 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.27 per unit of volatility. If you would invest 787.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 44.00 from holding China Construction Bank or generate 5.59% 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 Construction Bank
Performance |
| Timeline |
| Tongyu Communication |
| China Construction Bank |
Tongyu Communication and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and China Construction
The main advantage of trading using opposite Tongyu Communication and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, China Construction 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 Construction will offset losses from the drop in China Construction's long position.| Tongyu Communication vs. Industrial and Commercial | Tongyu Communication vs. China Construction Bank | Tongyu Communication vs. Bank of China | Tongyu Communication vs. Agricultural Bank of |
| China Construction vs. Tongyu Communication | China Construction vs. Zhongtong Guomai Communication | China Construction vs. Changchun Faway Automobile | China Construction vs. Allwin Telecommunication 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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