Correlation Between Hygon Information and Chongqing Road
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By analyzing existing cross correlation between Hygon Information Technology and Chongqing Road Bridge, you can compare the effects of market volatilities on Hygon Information and Chongqing Road 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 Hygon Information with a short position of Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hygon Information and Chongqing Road.
Diversification Opportunities for Hygon Information and Chongqing Road
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hygon and Chongqing is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hygon Information Technology and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge and Hygon Information 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 Hygon Information Technology are associated (or correlated) with Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Hygon Information i.e., Hygon Information and Chongqing Road go up and down completely randomly.
Pair Corralation between Hygon Information and Chongqing Road
Assuming the 90 days trading horizon Hygon Information Technology is expected to under-perform the Chongqing Road. In addition to that, Hygon Information is 2.09 times more volatile than Chongqing Road Bridge. It trades about -0.06 of its total potential returns per unit of risk. Chongqing Road Bridge is currently generating about 0.17 per unit of volatility. If you would invest 519.00 in Chongqing Road Bridge on November 7, 2024 and sell it today you would earn a total of 26.00 from holding Chongqing Road Bridge or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hygon Information Technology vs. Chongqing Road Bridge
Performance |
| Timeline |
| Hygon Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chongqing Road Bridge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hygon Information and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hygon Information and Chongqing Road
The main advantage of trading using opposite Hygon Information and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hygon Information position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.The idea behind Hygon Information Technology and Chongqing Road Bridge pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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