Correlation Between BlueFocus Communication and Tongyu Communication
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By analyzing existing cross correlation between BlueFocus Communication Group and Tongyu Communication, you can compare the effects of market volatilities on BlueFocus Communication and Tongyu Communication 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 BlueFocus Communication with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlueFocus Communication and Tongyu Communication.
Diversification Opportunities for BlueFocus Communication and Tongyu Communication
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BlueFocus and Tongyu is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding BlueFocus Communication Group and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication and BlueFocus 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 BlueFocus Communication Group are associated (or correlated) with Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of BlueFocus Communication i.e., BlueFocus Communication and Tongyu Communication go up and down completely randomly.
Pair Corralation between BlueFocus Communication and Tongyu Communication
Assuming the 90 days trading horizon BlueFocus Communication is expected to generate 1.22 times less return on investment than Tongyu Communication. In addition to that, BlueFocus Communication is 1.03 times more volatile than Tongyu Communication. It trades about 0.04 of its total potential returns per unit of risk. Tongyu Communication is currently generating about 0.05 per unit of volatility. If you would invest 1,131 in Tongyu Communication on September 12, 2024 and sell it today you would earn a total of 504.00 from holding Tongyu Communication or generate 44.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlueFocus Communication Group vs. Tongyu Communication
Performance |
| Timeline |
| BlueFocus Communication |
| Tongyu Communication |
BlueFocus Communication and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlueFocus Communication and Tongyu Communication
The main advantage of trading using opposite BlueFocus Communication and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlueFocus Communication position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.The idea behind BlueFocus Communication Group and Tongyu Communication 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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