Correlation Between Qingdao Port and Hongrun Construction
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By analyzing existing cross correlation between Qingdao Port International and Hongrun Construction Group, you can compare the effects of market volatilities on Qingdao Port 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 Qingdao Port with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qingdao Port and Hongrun Construction.
Diversification Opportunities for Qingdao Port and Hongrun Construction
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qingdao and Hongrun is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Qingdao Port International and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Qingdao Port 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 Qingdao Port International 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 Qingdao Port i.e., Qingdao Port and Hongrun Construction go up and down completely randomly.
Pair Corralation between Qingdao Port and Hongrun Construction
Assuming the 90 days trading horizon Qingdao Port International is expected to under-perform the Hongrun Construction. But the stock apears to be less risky and, when comparing its historical volatility, Qingdao Port International is 3.2 times less risky than Hongrun Construction. The stock trades about -0.07 of its potential returns per unit of risk. The 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qingdao Port International vs. Hongrun Construction Group
Performance |
| Timeline |
| Qingdao Port Interna |
| Hongrun Construction |
Qingdao Port and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qingdao Port and Hongrun Construction
The main advantage of trading using opposite Qingdao Port and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qingdao Port 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.| Qingdao Port vs. Yili Chuanning Biotechnology | Qingdao Port vs. Jiangsu Jinling Sports | Qingdao Port vs. Dazhong Transportation Group | Qingdao Port vs. Shandong Sanyuan Biotechnology |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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