Correlation Between Tengda Construction and Lushang Property
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By analyzing existing cross correlation between Tengda Construction Group and Lushang Property Co, you can compare the effects of market volatilities on Tengda Construction and Lushang Property 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 Tengda Construction with a short position of Lushang Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tengda Construction and Lushang Property.
Diversification Opportunities for Tengda Construction and Lushang Property
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tengda and Lushang is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tengda Construction Group and Lushang Property Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lushang Property and Tengda 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 Tengda Construction Group are associated (or correlated) with Lushang Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lushang Property has no effect on the direction of Tengda Construction i.e., Tengda Construction and Lushang Property go up and down completely randomly.
Pair Corralation between Tengda Construction and Lushang Property
Assuming the 90 days trading horizon Tengda Construction Group is expected to generate 0.9 times more return on investment than Lushang Property. However, Tengda Construction Group is 1.12 times less risky than Lushang Property. It trades about 0.26 of its potential returns per unit of risk. Lushang Property Co is currently generating about 0.12 per unit of risk. If you would invest 191.00 in Tengda Construction Group on September 10, 2024 and sell it today you would earn a total of 78.00 from holding Tengda Construction Group or generate 40.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tengda Construction Group vs. Lushang Property Co
Performance |
Timeline |
Tengda Construction |
Lushang Property |
Tengda Construction and Lushang Property Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tengda Construction and Lushang Property
The main advantage of trading using opposite Tengda Construction and Lushang Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tengda Construction position performs unexpectedly, Lushang Property 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 Lushang Property will offset losses from the drop in Lushang Property's long position.Tengda Construction vs. Industrial and Commercial | Tengda Construction vs. Agricultural Bank of | Tengda Construction vs. China Construction Bank | Tengda Construction vs. Postal Savings Bank |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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