Correlation Between Aba Chemicals and Tongyu Communication
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By analyzing existing cross correlation between Aba Chemicals Corp and Tongyu Communication, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Tongyu Communication.
Diversification Opportunities for Aba Chemicals and Tongyu Communication
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aba and Tongyu is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication 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 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 Aba Chemicals i.e., Aba Chemicals and Tongyu Communication go up and down completely randomly.
Pair Corralation between Aba Chemicals and Tongyu Communication
Assuming the 90 days trading horizon Aba Chemicals is expected to generate 4.01 times less return on investment than Tongyu Communication. In addition to that, Aba Chemicals is 1.03 times more volatile than Tongyu Communication. It trades about 0.01 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Tongyu Communication
Performance |
| Timeline |
| Aba Chemicals Corp |
| Tongyu Communication |
Aba Chemicals and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Tongyu Communication
The main advantage of trading using opposite Aba Chemicals and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
| Tongyu Communication vs. Gansu Jiu Steel | Tongyu Communication vs. Shandong Mining Machinery | Tongyu Communication vs. Aba Chemicals Corp | Tongyu Communication vs. BlueFocus Communication Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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