Correlation Between Changchun Faway and Hongrun Construction
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By analyzing existing cross correlation between Changchun Faway Automobile and Hongrun Construction Group, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and Hongrun Construction.
Diversification Opportunities for Changchun Faway and Hongrun Construction
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changchun and Hongrun is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and Hongrun Construction go up and down completely randomly.
Pair Corralation between Changchun Faway and Hongrun Construction
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to generate 0.99 times more return on investment than Hongrun Construction. However, Changchun Faway Automobile is 1.01 times less risky than Hongrun Construction. It trades about 0.02 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about -0.01 per unit of risk. If you would invest 895.00 in Changchun Faway Automobile on August 25, 2024 and sell it today you would earn a total of 80.00 from holding Changchun Faway Automobile or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changchun Faway Automobile vs. Hongrun Construction Group
Performance |
| Timeline |
| Changchun Faway Auto |
| Hongrun Construction |
Changchun Faway and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and Hongrun Construction
The main advantage of trading using opposite Changchun Faway and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. Songz Automobile Air | Changchun Faway vs. Advanced Technology Materials | Changchun Faway vs. Sinomach Automobile Co | Changchun Faway vs. Ningxia Building Materials |
| Hongrun Construction vs. Ming Yang Smart | Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic 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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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