Correlation Between ChengDu Hi and Tianjin Hi
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By analyzing existing cross correlation between ChengDu Hi Tech Development and Tianjin Hi Tech Development, you can compare the effects of market volatilities on ChengDu Hi and Tianjin Hi 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 ChengDu Hi with a short position of Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChengDu Hi and Tianjin Hi.
Diversification Opportunities for ChengDu Hi and Tianjin Hi
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ChengDu and Tianjin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ChengDu Hi Tech Development and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech and ChengDu Hi 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 ChengDu Hi Tech Development are associated (or correlated) with Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of ChengDu Hi i.e., ChengDu Hi and Tianjin Hi go up and down completely randomly.
Pair Corralation between ChengDu Hi and Tianjin Hi
Assuming the 90 days trading horizon ChengDu Hi Tech Development is expected to generate 1.6 times more return on investment than Tianjin Hi. However, ChengDu Hi is 1.6 times more volatile than Tianjin Hi Tech Development. It trades about 0.1 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.0 per unit of risk. If you would invest 1,213 in ChengDu Hi Tech Development on September 3, 2024 and sell it today you would earn a total of 4,689 from holding ChengDu Hi Tech Development or generate 386.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChengDu Hi Tech Development vs. Tianjin Hi Tech Development
Performance |
| Timeline |
| ChengDu Hi Tech |
| Tianjin Hi Tech |
ChengDu Hi and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChengDu Hi and Tianjin Hi
The main advantage of trading using opposite ChengDu Hi and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChengDu Hi position performs unexpectedly, Tianjin Hi 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 Tianjin Hi will offset losses from the drop in Tianjin Hi's long position.| ChengDu Hi vs. Industrial and Commercial | ChengDu Hi vs. China Construction Bank | ChengDu Hi vs. Bank of China | ChengDu Hi vs. Agricultural Bank of |
| Tianjin Hi vs. Xinjiang Communications Construction | Tianjin Hi vs. CICT Mobile Communication | Tianjin Hi vs. Shandong Homey Aquatic | Tianjin Hi vs. Hunan Mendale Hometextile |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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