Correlation Between Aba Chemicals and Hongrun Construction
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By analyzing existing cross correlation between Aba Chemicals Corp and Hongrun Construction Group, you can compare the effects of market volatilities on Aba Chemicals and Hongrun Construction 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 Aba Chemicals with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Hongrun Construction.
Diversification Opportunities for Aba Chemicals and Hongrun Construction
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aba and Hongrun is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Hongrun Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongrun Construction has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Hongrun Construction go up and down completely randomly.
Pair Corralation between Aba Chemicals and Hongrun Construction
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Hongrun Construction. In addition to that, Aba Chemicals is 1.59 times more volatile than Hongrun Construction Group. It trades about -0.02 of its total potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.01 per unit of volatility. If you would invest 522.00 in Hongrun Construction Group on October 11, 2024 and sell it today you would lose (2.00) from holding Hongrun Construction Group or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Hongrun Construction Group
Performance |
| Timeline |
| Aba Chemicals Corp |
| Hongrun Construction |
Aba Chemicals and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Hongrun Construction
The main advantage of trading using opposite Aba Chemicals and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Hongrun Construction 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 Hongrun Construction will offset losses from the drop in Hongrun Construction's long position.| Aba Chemicals vs. China Reform Health | Aba Chemicals vs. De Rucci Healthy | Aba Chemicals vs. Tonghua Grape Wine | Aba Chemicals vs. Everjoy Health Group |
| Hongrun Construction vs. Aba Chemicals Corp | Hongrun Construction vs. Hunan TV Broadcast | Hongrun Construction vs. Zhongshan Broad Ocean Motor | Hongrun Construction vs. Chongqing Road Bridge |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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