Correlation Between Tongxing Environmental and Kingclean Electric
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By analyzing existing cross correlation between Tongxing Environmental Protection and Kingclean Electric Co, you can compare the effects of market volatilities on Tongxing Environmental and Kingclean Electric 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 Tongxing Environmental with a short position of Kingclean Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and Kingclean Electric.
Diversification Opportunities for Tongxing Environmental and Kingclean Electric
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tongxing and Kingclean is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect and Kingclean Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingclean Electric and Tongxing Environmental 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 Tongxing Environmental Protection are associated (or correlated) with Kingclean Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingclean Electric has no effect on the direction of Tongxing Environmental i.e., Tongxing Environmental and Kingclean Electric go up and down completely randomly.
Pair Corralation between Tongxing Environmental and Kingclean Electric
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to generate 2.87 times more return on investment than Kingclean Electric. However, Tongxing Environmental is 2.87 times more volatile than Kingclean Electric Co. It trades about 0.19 of its potential returns per unit of risk. Kingclean Electric Co is currently generating about -0.22 per unit of risk. If you would invest 1,401 in Tongxing Environmental Protection on September 1, 2024 and sell it today you would earn a total of 249.00 from holding Tongxing Environmental Protection or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. Kingclean Electric Co
Performance |
| Timeline |
| Tongxing Environmental |
| Kingclean Electric |
Tongxing Environmental and Kingclean Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and Kingclean Electric
The main advantage of trading using opposite Tongxing Environmental and Kingclean Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental position performs unexpectedly, Kingclean Electric 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 Kingclean Electric will offset losses from the drop in Kingclean Electric's long position.| Tongxing Environmental vs. Bank of China | Tongxing Environmental vs. Kweichow Moutai Co | Tongxing Environmental vs. PetroChina Co Ltd | Tongxing Environmental vs. Bank of Communications |
| Kingclean Electric vs. Shanghai Action Education | Kingclean Electric vs. Offshore Oil Engineering | Kingclean Electric vs. Union Semiconductor Co | Kingclean Electric vs. Beijing Kaiwen Education |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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