Correlation Between Tianjin Capital and Hongrun Construction
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By analyzing existing cross correlation between Tianjin Capital Environmental and Hongrun Construction Group, you can compare the effects of market volatilities on Tianjin Capital 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 Tianjin Capital with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Hongrun Construction.
Diversification Opportunities for Tianjin Capital and Hongrun Construction
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Hongrun is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Tianjin Capital 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 Tianjin Capital Environmental 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 Tianjin Capital i.e., Tianjin Capital and Hongrun Construction go up and down completely randomly.
Pair Corralation between Tianjin Capital and Hongrun Construction
Assuming the 90 days trading horizon Tianjin Capital is expected to generate 7.98 times less return on investment than Hongrun Construction. But when comparing it to its historical volatility, Tianjin Capital Environmental is 2.12 times less risky than Hongrun Construction. It trades about 0.06 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 410.00 in Hongrun Construction Group on September 3, 2024 and sell it today you would earn a total of 55.00 from holding Hongrun Construction Group or generate 13.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Hongrun Construction Group
Performance |
| Timeline |
| Tianjin Capital Envi |
| Hongrun Construction |
Tianjin Capital and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Hongrun Construction
The main advantage of trading using opposite Tianjin Capital and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital 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.| Tianjin Capital vs. Hangzhou Coco Healthcare | Tianjin Capital vs. Advanced Technology Materials | Tianjin Capital vs. Sunny Loan Top | Tianjin Capital vs. Meinian Onehealth Healthcare |
| Hongrun Construction vs. Ye Chiu Metal | Hongrun Construction vs. Jiangsu Jinling Sports | Hongrun Construction vs. Shengda Mining Co | Hongrun Construction vs. Tianjin Capital Environmental |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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