Correlation Between Tieling Newcity and Shanghai Xinhua
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By analyzing existing cross correlation between Tieling Newcity Investment and Shanghai Xinhua Media, you can compare the effects of market volatilities on Tieling Newcity and Shanghai Xinhua 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 Shanghai Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and Shanghai Xinhua.
Diversification Opportunities for Tieling Newcity and Shanghai Xinhua
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tieling and Shanghai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and Shanghai Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Xinhua Media 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 Shanghai Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Xinhua Media has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and Shanghai Xinhua go up and down completely randomly.
Pair Corralation between Tieling Newcity and Shanghai Xinhua
Assuming the 90 days trading horizon Tieling Newcity Investment is expected to generate 0.71 times more return on investment than Shanghai Xinhua. However, Tieling Newcity Investment is 1.41 times less risky than Shanghai Xinhua. It trades about 0.16 of its potential returns per unit of risk. Shanghai Xinhua Media is currently generating about -0.06 per unit of risk. If you would invest 242.00 in Tieling Newcity Investment on November 7, 2024 and sell it today you would earn a total of 66.00 from holding Tieling Newcity Investment or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tieling Newcity Investment vs. Shanghai Xinhua Media
Performance |
| Timeline |
| Tieling Newcity Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Shanghai Xinhua Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tieling Newcity and Shanghai Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tieling Newcity and Shanghai Xinhua
The main advantage of trading using opposite Tieling Newcity and Shanghai Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tieling Newcity position performs unexpectedly, Shanghai Xinhua 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 Shanghai Xinhua will offset losses from the drop in Shanghai Xinhua's long position.The idea behind Tieling Newcity Investment and Shanghai Xinhua Media 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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