Correlation Between Industrial and Hongrun Construction
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By analyzing existing cross correlation between Industrial and Commercial and Hongrun Construction Group, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and Hongrun Construction.
Diversification Opportunities for Industrial and Hongrun Construction
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Industrial and Hongrun is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and Hongrun Construction go up and down completely randomly.
Pair Corralation between Industrial and Hongrun Construction
Assuming the 90 days trading horizon Industrial is expected to generate 1.81 times less return on investment than Hongrun Construction. But when comparing it to its historical volatility, Industrial and Commercial is 1.7 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Hongrun Construction Group on September 1, 2024 and sell it today you would earn a total of 84.00 from holding Hongrun Construction Group or generate 22.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. Hongrun Construction Group
Performance |
| Timeline |
| Industrial and Commercial |
| Hongrun Construction |
Industrial and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and Hongrun Construction
The main advantage of trading using opposite Industrial and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. Fiberhome Telecommunication Technologies | Industrial vs. Chengdu Spaceon Electronics | Industrial vs. Zhongtong Guomai Communication | Industrial vs. Railway Signal Communication |
| Hongrun Construction vs. 159681 | Hongrun Construction vs. 159005 | Hongrun Construction vs. Loctek Ergonomic Technology | Hongrun Construction vs. 516220 |
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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