Correlation Between Shaanxi Construction and Tongxing Environmental
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By analyzing existing cross correlation between Shaanxi Construction Machinery and Tongxing Environmental Protection, you can compare the effects of market volatilities on Shaanxi Construction and Tongxing Environmental 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 Shaanxi Construction with a short position of Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Construction and Tongxing Environmental.
Diversification Opportunities for Shaanxi Construction and Tongxing Environmental
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shaanxi and Tongxing is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Construction Machinery and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental and Shaanxi Construction 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 Shaanxi Construction Machinery are associated (or correlated) with Tongxing Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxing Environmental has no effect on the direction of Shaanxi Construction i.e., Shaanxi Construction and Tongxing Environmental go up and down completely randomly.
Pair Corralation between Shaanxi Construction and Tongxing Environmental
Assuming the 90 days trading horizon Shaanxi Construction is expected to generate 1.08 times less return on investment than Tongxing Environmental. In addition to that, Shaanxi Construction is 1.55 times more volatile than Tongxing Environmental Protection. It trades about 0.09 of its total potential returns per unit of risk. Tongxing Environmental Protection is currently generating about 0.15 per unit of volatility. If you would invest 1,411 in Tongxing Environmental Protection on November 5, 2024 and sell it today you would earn a total of 74.00 from holding Tongxing Environmental Protection or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Construction Machinery vs. Tongxing Environmental Protect
Performance |
| Timeline |
| Shaanxi Construction |
| Tongxing Environmental |
Shaanxi Construction and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Construction and Tongxing Environmental
The main advantage of trading using opposite Shaanxi Construction and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Construction position performs unexpectedly, Tongxing Environmental 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 Tongxing Environmental will offset losses from the drop in Tongxing Environmental's long position.| Shaanxi Construction vs. Agricultural Bank of | Shaanxi Construction vs. Industrial and Commercial | Shaanxi Construction vs. Bank of China | Shaanxi Construction vs. PetroChina Co Ltd |
| Tongxing Environmental vs. Industrial and Commercial | Tongxing Environmental vs. Agricultural Bank of | Tongxing Environmental vs. China Construction Bank | Tongxing Environmental 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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