Correlation Between Huitong Construction and Shantui Construction
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By analyzing existing cross correlation between Huitong Construction Group and Shantui Construction Machinery, you can compare the effects of market volatilities on Huitong Construction and Shantui 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 Huitong Construction with a short position of Shantui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huitong Construction and Shantui Construction.
Diversification Opportunities for Huitong Construction and Shantui Construction
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Huitong and Shantui is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Huitong Construction Group and Shantui Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shantui Construction and Huitong 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 Huitong Construction Group are associated (or correlated) with Shantui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shantui Construction has no effect on the direction of Huitong Construction i.e., Huitong Construction and Shantui Construction go up and down completely randomly.
Pair Corralation between Huitong Construction and Shantui Construction
Assuming the 90 days trading horizon Huitong Construction is expected to generate 8.0 times less return on investment than Shantui Construction. But when comparing it to its historical volatility, Huitong Construction Group is 1.48 times less risky than Shantui Construction. It trades about 0.05 of its potential returns per unit of risk. Shantui Construction Machinery is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 839.00 in Shantui Construction Machinery on August 29, 2024 and sell it today you would earn a total of 175.00 from holding Shantui Construction Machinery or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huitong Construction Group vs. Shantui Construction Machinery
Performance |
| Timeline |
| Huitong Construction |
| Shantui Construction |
Huitong Construction and Shantui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huitong Construction and Shantui Construction
The main advantage of trading using opposite Huitong Construction and Shantui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huitong Construction position performs unexpectedly, Shantui 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 Shantui Construction will offset losses from the drop in Shantui Construction's long position.| Huitong Construction vs. Ming Yang Smart | Huitong Construction vs. 159681 | Huitong Construction vs. 159005 | Huitong Construction vs. Loctek Ergonomic Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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