Correlation Between Konfoong Materials and Tongxing Environmental
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By analyzing existing cross correlation between Konfoong Materials International and Tongxing Environmental Protection, you can compare the effects of market volatilities on Konfoong Materials and Tongxing Environmental 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 Konfoong Materials with a short position of Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Konfoong Materials and Tongxing Environmental.
Diversification Opportunities for Konfoong Materials and Tongxing Environmental
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Konfoong and Tongxing is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Konfoong Materials Internation and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental and Konfoong Materials 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 Konfoong Materials International are associated (or correlated) with Tongxing Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxing Environmental has no effect on the direction of Konfoong Materials i.e., Konfoong Materials and Tongxing Environmental go up and down completely randomly.
Pair Corralation between Konfoong Materials and Tongxing Environmental
Assuming the 90 days trading horizon Konfoong Materials International is expected to under-perform the Tongxing Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Konfoong Materials International is 1.52 times less risky than Tongxing Environmental. The stock trades about -0.22 of its potential returns per unit of risk. The Tongxing Environmental Protection is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,442 in Tongxing Environmental Protection on October 11, 2024 and sell it today you would earn a total of 3.00 from holding Tongxing Environmental Protection or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Konfoong Materials Internation vs. Tongxing Environmental Protect
Performance |
| Timeline |
| Konfoong Materials |
| Tongxing Environmental |
Konfoong Materials and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Konfoong Materials and Tongxing Environmental
The main advantage of trading using opposite Konfoong Materials and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konfoong Materials position performs unexpectedly, Tongxing Environmental 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 Tongxing Environmental will offset losses from the drop in Tongxing Environmental's long position.| Konfoong Materials vs. Sinofibers Technology Co | Konfoong Materials vs. Miracll Chemicals Co | Konfoong Materials vs. Xizi Clean Energy | Konfoong Materials vs. Jinhe Biotechnology Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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