Correlation Between Runjian Communication and Dongxing Sec
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By analyzing existing cross correlation between Runjian Communication Co and Dongxing Sec Co, you can compare the effects of market volatilities on Runjian Communication and Dongxing Sec 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 Dongxing Sec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Runjian Communication and Dongxing Sec.
Diversification Opportunities for Runjian Communication and Dongxing Sec
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Runjian and Dongxing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Runjian Communication Co and Dongxing Sec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongxing Sec 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 Dongxing Sec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongxing Sec has no effect on the direction of Runjian Communication i.e., Runjian Communication and Dongxing Sec go up and down completely randomly.
Pair Corralation between Runjian Communication and Dongxing Sec
Assuming the 90 days trading horizon Runjian Communication Co is expected to under-perform the Dongxing Sec. In addition to that, Runjian Communication is 1.53 times more volatile than Dongxing Sec Co. It trades about 0.0 of its total potential returns per unit of risk. Dongxing Sec Co is currently generating about 0.05 per unit of volatility. If you would invest 791.00 in Dongxing Sec Co on September 28, 2024 and sell it today you would earn a total of 392.00 from holding Dongxing Sec Co or generate 49.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Runjian Communication Co vs. Dongxing Sec Co
Performance |
| Timeline |
| Runjian Communication |
| Dongxing Sec |
Runjian Communication and Dongxing Sec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Runjian Communication and Dongxing Sec
The main advantage of trading using opposite Runjian Communication and Dongxing Sec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Runjian Communication position performs unexpectedly, Dongxing Sec 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 Dongxing Sec will offset losses from the drop in Dongxing Sec's long position.The idea behind Runjian Communication Co and Dongxing Sec Co 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.
| Dongxing Sec vs. Runjian Communication Co | Dongxing Sec vs. Fiberhome Telecommunication Technologies | Dongxing Sec vs. Nanjing Putian Telecommunications | Dongxing Sec vs. Penyao Environmental Protection |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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