Correlation Between Tongyu Communication and Sichuan Hebang
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By analyzing existing cross correlation between Tongyu Communication and Sichuan Hebang Biotechnology, you can compare the effects of market volatilities on Tongyu Communication and Sichuan Hebang 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 Sichuan Hebang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Sichuan Hebang.
Diversification Opportunities for Tongyu Communication and Sichuan Hebang
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tongyu and Sichuan is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Sichuan Hebang Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Hebang Biote 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 Sichuan Hebang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Hebang Biote has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Sichuan Hebang go up and down completely randomly.
Pair Corralation between Tongyu Communication and Sichuan Hebang
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.64 times more return on investment than Sichuan Hebang. However, Tongyu Communication is 1.64 times more volatile than Sichuan Hebang Biotechnology. It trades about 0.12 of its potential returns per unit of risk. Sichuan Hebang Biotechnology is currently generating about 0.06 per unit of risk. If you would invest 1,082 in Tongyu Communication on September 3, 2024 and sell it today you would earn a total of 604.00 from holding Tongyu Communication or generate 55.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Sichuan Hebang Biotechnology
Performance |
| Timeline |
| Tongyu Communication |
| Sichuan Hebang Biote |
Tongyu Communication and Sichuan Hebang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Sichuan Hebang
The main advantage of trading using opposite Tongyu Communication and Sichuan Hebang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Sichuan Hebang 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 Sichuan Hebang will offset losses from the drop in Sichuan Hebang's long position.| Tongyu Communication vs. Agricultural Bank of | Tongyu Communication vs. China Construction Bank | Tongyu Communication vs. Postal Savings Bank | Tongyu Communication vs. Bank of Communications |
| Sichuan Hebang vs. Zijin Mining Group | Sichuan Hebang vs. Baoshan Iron Steel | Sichuan Hebang vs. Hoshine Silicon Ind |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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