Correlation Between Tongyu Communication and Western Superconducting
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By analyzing existing cross correlation between Tongyu Communication and Western Superconducting Tech, you can compare the effects of market volatilities on Tongyu Communication and Western Superconducting 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 Western Superconducting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Western Superconducting.
Diversification Opportunities for Tongyu Communication and Western Superconducting
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tongyu and Western is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Western Superconducting Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Superconducting 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 Western Superconducting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Superconducting has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Western Superconducting go up and down completely randomly.
Pair Corralation between Tongyu Communication and Western Superconducting
Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.88 times more return on investment than Western Superconducting. However, Tongyu Communication is 1.88 times more volatile than Western Superconducting Tech. It trades about 0.24 of its potential returns per unit of risk. Western Superconducting Tech is currently generating about -0.18 per unit of risk. If you would invest 1,331 in Tongyu Communication on September 4, 2024 and sell it today you would earn a total of 355.00 from holding Tongyu Communication or generate 26.67% 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. Western Superconducting Tech
Performance |
| Timeline |
| Tongyu Communication |
| Western Superconducting |
Tongyu Communication and Western Superconducting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongyu Communication and Western Superconducting
The main advantage of trading using opposite Tongyu Communication and Western Superconducting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Western Superconducting 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 Western Superconducting will offset losses from the drop in Western Superconducting'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 |
| Western Superconducting vs. Bank of China | Western Superconducting vs. Kweichow Moutai Co | Western Superconducting vs. PetroChina Co Ltd | Western Superconducting vs. Bank of Communications |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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