Correlation Between Runjian Communication and Fujian Oriental
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By analyzing existing cross correlation between Runjian Communication Co and Fujian Oriental Silver, you can compare the effects of market volatilities on Runjian Communication and Fujian Oriental 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 Fujian Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Fujian Oriental.
Diversification Opportunities for Runjian Communication and Fujian Oriental
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Runjian and Fujian is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Fujian Oriental Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Oriental Silver 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 Fujian Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Oriental Silver has no effect on the direction of Runjian Communication i.e., Runjian Communication and Fujian Oriental go up and down completely randomly.
Pair Corralation between Runjian Communication and Fujian Oriental
Assuming the 90 days trading horizon Runjian Communication Co is expected to generate 0.88 times more return on investment than Fujian Oriental. However, Runjian Communication Co is 1.13 times less risky than Fujian Oriental. It trades about -0.01 of its potential returns per unit of risk. Fujian Oriental Silver is currently generating about -0.03 per unit of risk. If you would invest 4,609 in Runjian Communication Co on October 15, 2024 and sell it today you would lose (1,637) from holding Runjian Communication Co or give up 35.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Runjian Communication Co vs. Fujian Oriental Silver
Performance |
| Timeline |
| Runjian Communication |
| Fujian Oriental Silver |
Runjian Communication and Fujian Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Fujian Oriental
The main advantage of trading using opposite Runjian Communication and Fujian Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Fujian Oriental 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 Fujian Oriental will offset losses from the drop in Fujian Oriental's long position.The idea behind Runjian Communication Co and Fujian Oriental Silver 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.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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