Correlation Between UE Furniture and Tongyu Communication
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By analyzing existing cross correlation between UE Furniture Co and Tongyu Communication, you can compare the effects of market volatilities on UE Furniture and Tongyu Communication 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 UE Furniture with a short position of Tongyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of UE Furniture and Tongyu Communication.
Diversification Opportunities for UE Furniture and Tongyu Communication
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 603600 and Tongyu is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding UE Furniture Co and Tongyu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongyu Communication and UE Furniture 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 UE Furniture Co are associated (or correlated) with Tongyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongyu Communication has no effect on the direction of UE Furniture i.e., UE Furniture and Tongyu Communication go up and down completely randomly.
Pair Corralation between UE Furniture and Tongyu Communication
Assuming the 90 days trading horizon UE Furniture Co is expected to under-perform the Tongyu Communication. But the stock apears to be less risky and, when comparing its historical volatility, UE Furniture Co is 2.25 times less risky than Tongyu Communication. The stock trades about -0.04 of its potential returns per unit of risk. The Tongyu Communication is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,344 in Tongyu Communication on August 25, 2024 and sell it today you would earn a total of 421.00 from holding Tongyu Communication or generate 31.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UE Furniture Co vs. Tongyu Communication
Performance |
| Timeline |
| UE Furniture |
| Tongyu Communication |
UE Furniture and Tongyu Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UE Furniture and Tongyu Communication
The main advantage of trading using opposite UE Furniture and Tongyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UE Furniture position performs unexpectedly, Tongyu Communication 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 Tongyu Communication will offset losses from the drop in Tongyu Communication's long position.| UE Furniture vs. Jiangsu Yanghe Brewery | UE Furniture vs. Shandong Mining Machinery | UE Furniture vs. Eastern Air Logistics | UE Furniture vs. Chengtun Mining Group |
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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