Correlation Between Runjian Communication and Kangxin New
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By analyzing existing cross correlation between Runjian Communication Co and Kangxin New Materials, you can compare the effects of market volatilities on Runjian Communication and Kangxin New 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 Kangxin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Kangxin New.
Diversification Opportunities for Runjian Communication and Kangxin New
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Runjian and Kangxin is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Kangxin New Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangxin New Materials 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 Kangxin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangxin New Materials has no effect on the direction of Runjian Communication i.e., Runjian Communication and Kangxin New go up and down completely randomly.
Pair Corralation between Runjian Communication and Kangxin New
Assuming the 90 days trading horizon Runjian Communication Co is expected to generate 1.45 times more return on investment than Kangxin New. However, Runjian Communication is 1.45 times more volatile than Kangxin New Materials. It trades about -0.05 of its potential returns per unit of risk. Kangxin New Materials is currently generating about -0.74 per unit of risk. If you would invest 3,143 in Runjian Communication Co on October 13, 2024 and sell it today you would lose (171.00) from holding Runjian Communication Co or give up 5.44% 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. Kangxin New Materials
Performance |
| Timeline |
| Runjian Communication |
| Kangxin New Materials |
Runjian Communication and Kangxin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Kangxin New
The main advantage of trading using opposite Runjian Communication and Kangxin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Kangxin New 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 Kangxin New will offset losses from the drop in Kangxin New's long position.The idea behind Runjian Communication Co and Kangxin New Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Kangxin New vs. Runjian Communication Co | Kangxin New vs. Allwin Telecommunication Co | Kangxin New vs. Zhongrun Resources Investment | Kangxin New vs. Hunan Investment Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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