Correlation Between China Galaxy and Hongrun Construction
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By analyzing existing cross correlation between China Galaxy Securities and Hongrun Construction Group, you can compare the effects of market volatilities on China Galaxy 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 China Galaxy with a short position of Hongrun Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Galaxy and Hongrun Construction.
Diversification Opportunities for China Galaxy and Hongrun Construction
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Hongrun is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Galaxy Securities and Hongrun Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongrun Construction and China Galaxy 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 China Galaxy Securities 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 China Galaxy i.e., China Galaxy and Hongrun Construction go up and down completely randomly.
Pair Corralation between China Galaxy and Hongrun Construction
Assuming the 90 days trading horizon China Galaxy Securities is expected to generate 1.04 times more return on investment than Hongrun Construction. However, China Galaxy is 1.04 times more volatile than Hongrun Construction Group. It trades about 0.04 of its potential returns per unit of risk. Hongrun Construction Group is currently generating about 0.04 per unit of risk. If you would invest 1,183 in China Galaxy Securities on October 30, 2024 and sell it today you would earn a total of 214.00 from holding China Galaxy Securities or generate 18.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Galaxy Securities vs. Hongrun Construction Group
Performance |
| Timeline |
| China Galaxy Securities |
| Hongrun Construction |
China Galaxy and Hongrun Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Galaxy and Hongrun Construction
The main advantage of trading using opposite China Galaxy and Hongrun Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Galaxy 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.| China Galaxy vs. Industrial and Commercial | China Galaxy vs. Kweichow Moutai Co | China Galaxy vs. Agricultural Bank of | China Galaxy vs. China Mobile Limited |
| Hongrun Construction vs. Industrial and Commercial | Hongrun Construction vs. China Construction Bank | Hongrun Construction vs. Agricultural Bank of | Hongrun Construction 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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