Correlation Between Dr Peng and Hongrun Construction
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By analyzing existing cross correlation between Dr Peng Telecom and Hongrun Construction Group, you can compare the effects of market volatilities on Dr Peng 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 Dr Peng with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Peng and Hongrun Construction.
Diversification Opportunities for Dr Peng and Hongrun Construction
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 600804 and Hongrun is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dr Peng Telecom and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Dr Peng 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 Dr Peng Telecom 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 Dr Peng i.e., Dr Peng and Hongrun Construction go up and down completely randomly.
Pair Corralation between Dr Peng and Hongrun Construction
Assuming the 90 days trading horizon Dr Peng Telecom is expected to under-perform the Hongrun Construction. In addition to that, Dr Peng is 1.45 times more volatile than Hongrun Construction Group. It trades about -0.05 of its total potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.18 per unit of volatility. If you would invest 455.00 in Hongrun Construction Group on November 20, 2024 and sell it today you would earn a total of 80.00 from holding Hongrun Construction Group or generate 17.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Dr Peng Telecom vs. Hongrun Construction Group
Performance |
Timeline |
Dr Peng Telecom |
Hongrun Construction |
Dr Peng and Hongrun Construction Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dr Peng and Hongrun Construction
The main advantage of trading using opposite Dr Peng and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Peng 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.Dr Peng vs. Xinya Electronic Co | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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