Correlation Between Tongyu Communication and Namchow Food
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By analyzing existing cross correlation between Tongyu Communication and Namchow Food Group, you can compare the effects of market volatilities on Tongyu Communication and Namchow Food 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 Namchow Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Namchow Food.
Diversification Opportunities for Tongyu Communication and Namchow Food
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tongyu and Namchow is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Namchow Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namchow Food 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 Namchow Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namchow Food Group has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Namchow Food go up and down completely randomly.
Pair Corralation between Tongyu Communication and Namchow Food
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.62 times less return on investment than Namchow Food. But when comparing it to its historical volatility, Tongyu Communication is 1.16 times less risky than Namchow Food. It trades about 0.02 of its potential returns per unit of risk. Namchow Food Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,718 in Namchow Food Group on November 3, 2024 and sell it today you would earn a total of 14.00 from holding Namchow Food Group or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongyu Communication vs. Namchow Food Group
Performance |
| Timeline |
| Tongyu Communication |
| Namchow Food Group |
Tongyu Communication and Namchow Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Namchow Food
The main advantage of trading using opposite Tongyu Communication and Namchow Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Namchow Food 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 Namchow Food will offset losses from the drop in Namchow Food's long position.| Tongyu Communication vs. Miracll Chemicals Co | Tongyu Communication vs. Gan Yuan Foods | Tongyu Communication vs. Masterwork Machinery | Tongyu Communication vs. Lutian Machinery Co |
| Namchow Food vs. Newcapec Electronics Co | Namchow Food vs. Kontour Medical Technology | Namchow Food vs. Chison Medical Technologies | Namchow Food vs. BrightGene Bio Medical |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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