Correlation Between Tieling Newcity and Shijiazhuang Yiling
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By analyzing existing cross correlation between Tieling Newcity Investment and Shijiazhuang Yiling Pharmaceutical, you can compare the effects of market volatilities on Tieling Newcity and Shijiazhuang Yiling 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 Tieling Newcity with a short position of Shijiazhuang Yiling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and Shijiazhuang Yiling.
Diversification Opportunities for Tieling Newcity and Shijiazhuang Yiling
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tieling and Shijiazhuang is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and Shijiazhuang Yiling Pharmaceut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Yiling and Tieling Newcity 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 Tieling Newcity Investment are associated (or correlated) with Shijiazhuang Yiling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Yiling has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and Shijiazhuang Yiling go up and down completely randomly.
Pair Corralation between Tieling Newcity and Shijiazhuang Yiling
Assuming the 90 days trading horizon Tieling Newcity Investment is expected to generate 1.55 times more return on investment than Shijiazhuang Yiling. However, Tieling Newcity is 1.55 times more volatile than Shijiazhuang Yiling Pharmaceutical. It trades about 0.02 of its potential returns per unit of risk. Shijiazhuang Yiling Pharmaceutical is currently generating about -0.04 per unit of risk. If you would invest 304.00 in Tieling Newcity Investment on September 14, 2024 and sell it today you would earn a total of 11.00 from holding Tieling Newcity Investment or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Tieling Newcity Investment vs. Shijiazhuang Yiling Pharmaceut
Performance |
| Timeline |
| Tieling Newcity Inve |
| Shijiazhuang Yiling |
Tieling Newcity and Shijiazhuang Yiling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tieling Newcity and Shijiazhuang Yiling
The main advantage of trading using opposite Tieling Newcity and Shijiazhuang Yiling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tieling Newcity position performs unexpectedly, Shijiazhuang Yiling 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 Shijiazhuang Yiling will offset losses from the drop in Shijiazhuang Yiling's long position.| Tieling Newcity vs. PetroChina Co Ltd | Tieling Newcity vs. China Mobile Limited | Tieling Newcity vs. CNOOC Limited | Tieling Newcity vs. Ping An Insurance |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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