Correlation Between Datang HuaYin and Tongding Interconnection
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By analyzing existing cross correlation between Datang HuaYin Electric and Tongding Interconnection Information, you can compare the effects of market volatilities on Datang HuaYin and Tongding Interconnection 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 Datang HuaYin with a short position of Tongding Interconnection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and Tongding Interconnection.
Diversification Opportunities for Datang HuaYin and Tongding Interconnection
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Datang and Tongding is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric and Tongding Interconnection Infor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongding Interconnection and Datang HuaYin 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 Datang HuaYin Electric are associated (or correlated) with Tongding Interconnection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongding Interconnection has no effect on the direction of Datang HuaYin i.e., Datang HuaYin and Tongding Interconnection go up and down completely randomly.
Pair Corralation between Datang HuaYin and Tongding Interconnection
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to under-perform the Tongding Interconnection. But the stock apears to be less risky and, when comparing its historical volatility, Datang HuaYin Electric is 1.16 times less risky than Tongding Interconnection. The stock trades about -0.03 of its potential returns per unit of risk. The Tongding Interconnection Information is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 383.00 in Tongding Interconnection Information on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Tongding Interconnection Information or generate 18.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. Tongding Interconnection Infor
Performance |
| Timeline |
| Datang HuaYin Electric |
| Tongding Interconnection |
Datang HuaYin and Tongding Interconnection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and Tongding Interconnection
The main advantage of trading using opposite Datang HuaYin and Tongding Interconnection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin position performs unexpectedly, Tongding Interconnection 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 Tongding Interconnection will offset losses from the drop in Tongding Interconnection's long position.| Datang HuaYin vs. Industrial and Commercial | Datang HuaYin vs. China Construction Bank | Datang HuaYin vs. Agricultural Bank of | Datang HuaYin vs. Bank of China |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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