Correlation Between Tieling Newcity and Gem Year
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By analyzing existing cross correlation between Tieling Newcity Investment and Gem Year Industrial Co, you can compare the effects of market volatilities on Tieling Newcity and Gem Year 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 Gem Year. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and Gem Year.
Diversification Opportunities for Tieling Newcity and Gem Year
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tieling and Gem is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and Gem Year Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gem Year Industrial 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 Gem Year. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gem Year Industrial has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and Gem Year go up and down completely randomly.
Pair Corralation between Tieling Newcity and Gem Year
Assuming the 90 days trading horizon Tieling Newcity is expected to generate 2.01 times less return on investment than Gem Year. But when comparing it to its historical volatility, Tieling Newcity Investment is 1.46 times less risky than Gem Year. It trades about 0.19 of its potential returns per unit of risk. Gem Year Industrial Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 355.00 in Gem Year Industrial Co on August 25, 2024 and sell it today you would earn a total of 85.00 from holding Gem Year Industrial Co or generate 23.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tieling Newcity Investment vs. Gem Year Industrial Co
Performance |
| Timeline |
| Tieling Newcity Inve |
| Gem Year Industrial |
Tieling Newcity and Gem Year Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tieling Newcity and Gem Year
The main advantage of trading using opposite Tieling Newcity and Gem Year positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tieling Newcity position performs unexpectedly, Gem Year 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 Gem Year will offset losses from the drop in Gem Year's long position.| Tieling Newcity vs. Air China Ltd | Tieling Newcity vs. Huatian Hotel Group | Tieling Newcity vs. BTG Hotels Group | Tieling Newcity vs. Aurora Optoelectronics Co |
| Gem Year vs. Tieling Newcity Investment | Gem Year vs. Hubei Geoway Investment | Gem Year vs. Xiandai Investment Co | Gem Year vs. Zoje Resources 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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