Correlation Between Fushun Special and Tongxing Environmental
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By analyzing existing cross correlation between Fushun Special Steel and Tongxing Environmental Protection, you can compare the effects of market volatilities on Fushun Special 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 Fushun Special with a short position of Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fushun Special and Tongxing Environmental.
Diversification Opportunities for Fushun Special and Tongxing Environmental
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fushun and Tongxing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Fushun Special Steel and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental and Fushun Special 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 Fushun Special Steel 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 Fushun Special i.e., Fushun Special and Tongxing Environmental go up and down completely randomly.
Pair Corralation between Fushun Special and Tongxing Environmental
Assuming the 90 days trading horizon Fushun Special Steel is expected to under-perform the Tongxing Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Fushun Special Steel is 1.25 times less risky than Tongxing Environmental. The stock trades about -0.15 of its potential returns per unit of risk. The Tongxing Environmental Protection is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,362 in Tongxing Environmental Protection on August 25, 2024 and sell it today you would earn a total of 309.00 from holding Tongxing Environmental Protection or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fushun Special Steel vs. Tongxing Environmental Protect
Performance |
| Timeline |
| Fushun Special Steel |
| Tongxing Environmental |
Fushun Special and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fushun Special and Tongxing Environmental
The main advantage of trading using opposite Fushun Special and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fushun Special 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.| Fushun Special vs. Zijin Mining Group | Fushun Special vs. Wanhua Chemical Group | Fushun Special vs. Baoshan Iron Steel | Fushun Special vs. Shandong Gold Mining |
| Tongxing Environmental vs. China Petroleum Chemical | Tongxing Environmental vs. PetroChina Co Ltd | Tongxing Environmental vs. China State Construction | Tongxing Environmental vs. China Railway 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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