Correlation Between Runjian Communication and Digital China
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By analyzing existing cross correlation between Runjian Communication Co and Digital China Information, you can compare the effects of market volatilities on Runjian Communication and Digital China 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 Runjian Communication with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Digital China.
Diversification Opportunities for Runjian Communication and Digital China
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Runjian and Digital is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and Runjian 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 Runjian Communication Co are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of Runjian Communication i.e., Runjian Communication and Digital China go up and down completely randomly.
Pair Corralation between Runjian Communication and Digital China
Assuming the 90 days trading horizon Runjian Communication Co is expected to generate 0.82 times more return on investment than Digital China. However, Runjian Communication Co is 1.22 times less risky than Digital China. It trades about -0.02 of its potential returns per unit of risk. Digital China Information is currently generating about -0.18 per unit of risk. If you would invest 3,083 in Runjian Communication Co on October 11, 2024 and sell it today you would lose (92.00) from holding Runjian Communication Co or give up 2.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. Digital China Information
Performance |
| Timeline |
| Runjian Communication |
| Digital China Information |
Runjian Communication and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Digital China
The main advantage of trading using opposite Runjian Communication and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| Runjian Communication vs. Heilongjiang Publishing Media | Runjian Communication vs. Ligao Foods CoLtd | Runjian Communication vs. Youyou Foods Co | Runjian Communication vs. Guangdong Wens Foodstuff |
| Digital China vs. China Minmetals Rare | Digital China vs. Xinjiang Baodi Mining | Digital China vs. Lotus Health Group | Digital China vs. Hefei Metalforming Mach |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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