Correlation Between Huitong Construction and Dycom Industries

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

Diversification Opportunities for Huitong Construction and Dycom Industries

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Huitong and Dycom is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Huitong Construction Group and Dycom Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dycom Industries and Huitong 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 Huitong Construction Group are associated (or correlated) with Dycom Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dycom Industries has no effect on the direction of Huitong Construction i.e., Huitong Construction and Dycom Industries go up and down completely randomly.

Pair Corralation between Huitong Construction and Dycom Industries

Assuming the 90 days trading horizon Huitong Construction Group is expected to under-perform the Dycom Industries. But the stock apears to be less risky and, when comparing its historical volatility, Huitong Construction Group is 1.26 times less risky than Dycom Industries. The stock trades about -0.14 of its potential returns per unit of risk. The Dycom Industries is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  26,936  in Dycom Industries on August 15, 2025 and sell it today you would earn a total of  1,333  from holding Dycom Industries or generate 4.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy90.63%
ValuesDaily Returns

Huitong Construction Group  vs.  Dycom Industries

 Performance 
       Timeline  
Huitong Construction 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Huitong Construction Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Dycom Industries 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dycom Industries are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Dycom Industries is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Huitong Construction and Dycom Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Huitong Construction and Dycom Industries

The main advantage of trading using opposite Huitong Construction and Dycom Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huitong Construction position performs unexpectedly, Dycom Industries 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 Dycom Industries will offset losses from the drop in Dycom Industries' long position.
The idea behind Huitong Construction Group and Dycom Industries 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.
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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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