Correlation Between Tongyu Communication and G-bits Network

Can any of the company-specific risk be diversified away by investing in both Tongyu Communication and G-bits Network at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tongyu Communication and G-bits Network into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tongyu Communication and G bits Network Technology, you can compare the effects of market volatilities on Tongyu Communication and G-bits Network 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 Tongyu Communication with a short position of G-bits Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and G-bits Network.

Diversification Opportunities for Tongyu Communication and G-bits Network

0.33

Correlation Coefficient

Tongyu Communication  G-bits Network

Weak diversification

The 3 months correlation between Tongyu and G-bits is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and G bits Network Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G bits Network and Tongyu Communication 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 Tongyu Communication are associated (or correlated) with G-bits Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G bits Network has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and G-bits Network go up and down completely randomly.

Pair Corralation between Tongyu Communication and G-bits Network

Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.17 times more return on investment than G-bits Network. However, Tongyu Communication is 1.17 times more volatile than G bits Network Technology. It trades about 0.23 of its potential returns per unit of risk. G bits Network Technology is currently generating about 0.05 per unit of risk. If you would invest  1,035  in Tongyu Communication on August 31, 2024 and sell it today you would earn a total of  668.00  from holding Tongyu Communication or generate 64.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tongyu Communication  vs.  G bits Network Technology

Tongyu Communication

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tongyu Communication are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tongyu Communication sustained solid returns over the last few months and may actually be approaching a breakup point.

G bits Network

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in G bits Network Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G-bits Network may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Tongyu Communication and G-bits Network

The main advantage of trading using opposite Tongyu Communication and G-bits Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, G-bits Network 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 G-bits Network will offset losses from the drop in G-bits Network's long position.

The idea behind Tongyu Communication and G bits Network Technology 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.