Correlation Between Long Yuan and Hunan Tyen
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By analyzing existing cross correlation between Long Yuan Construction and Hunan Tyen Machinery, you can compare the effects of market volatilities on Long Yuan and Hunan Tyen 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 Long Yuan with a short position of Hunan Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Long Yuan and Hunan Tyen.
Diversification Opportunities for Long Yuan and Hunan Tyen
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Long and Hunan is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Long Yuan Construction and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery and Long Yuan 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 Long Yuan Construction are associated (or correlated) with Hunan Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Long Yuan i.e., Long Yuan and Hunan Tyen go up and down completely randomly.
Pair Corralation between Long Yuan and Hunan Tyen
Assuming the 90 days trading horizon Long Yuan is expected to generate 4.11 times less return on investment than Hunan Tyen. But when comparing it to its historical volatility, Long Yuan Construction is 1.17 times less risky than Hunan Tyen. It trades about 0.01 of its potential returns per unit of risk. Hunan Tyen Machinery is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 495.00 in Hunan Tyen Machinery on August 25, 2024 and sell it today you would earn a total of 15.00 from holding Hunan Tyen Machinery or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Long Yuan Construction vs. Hunan Tyen Machinery
Performance |
| Timeline |
| Long Yuan Construction |
| Hunan Tyen Machinery |
Long Yuan and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Long Yuan and Hunan Tyen
The main advantage of trading using opposite Long Yuan and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Long Yuan position performs unexpectedly, Hunan Tyen 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 Hunan Tyen will offset losses from the drop in Hunan Tyen's long position.| Long Yuan vs. Iat Automobile Technology | Long Yuan vs. Masterwork Machinery | Long Yuan vs. Tjk Machinery Tianjin | Long Yuan vs. Hongrun Construction Group |
| Hunan Tyen vs. Kweichow Moutai Co | Hunan Tyen vs. Contemporary Amperex Technology | Hunan Tyen vs. G bits Network Technology | Hunan Tyen vs. Beijing Roborock Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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