Correlation Between Tongyu Communication and Shenyu Communication

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Can any of the company-specific risk be diversified away by investing in both Tongyu Communication and Shenyu Communication 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 Shenyu Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tongyu Communication and Shenyu Communication Technology, you can compare the effects of market volatilities on Tongyu Communication and Shenyu 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 Tongyu Communication with a short position of Shenyu Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongyu Communication and Shenyu Communication.

Diversification Opportunities for Tongyu Communication and Shenyu Communication

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Tongyu and Shenyu is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tongyu Communication and Shenyu Communication Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenyu Communication 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 Shenyu Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenyu Communication has no effect on the direction of Tongyu Communication i.e., Tongyu Communication and Shenyu Communication go up and down completely randomly.

Pair Corralation between Tongyu Communication and Shenyu Communication

Assuming the 90 days trading horizon Tongyu Communication is expected to generate 1.37 times more return on investment than Shenyu Communication. However, Tongyu Communication is 1.37 times more volatile than Shenyu Communication Technology. It trades about 0.25 of its potential returns per unit of risk. Shenyu Communication Technology is currently generating about -0.02 per unit of risk. If you would invest  1,689  in Tongyu Communication on September 12, 2025 and sell it today you would earn a total of  1,233  from holding Tongyu Communication or generate 73.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Tongyu Communication  vs.  Shenyu Communication Technolog

 Performance 
       Timeline  
Tongyu Communication 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tongyu Communication are ranked lower than 20 (%) 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.
Shenyu Communication 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Shenyu Communication Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shenyu Communication is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tongyu Communication and Shenyu Communication Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tongyu Communication and Shenyu Communication

The main advantage of trading using opposite Tongyu Communication and Shenyu Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongyu Communication position performs unexpectedly, Shenyu 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 Shenyu Communication will offset losses from the drop in Shenyu Communication's long position.
The idea behind Tongyu Communication and Shenyu Communication 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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