Correlation Between Tianshui Huatian and Lier Chemical
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By analyzing existing cross correlation between Tianshui Huatian Technology and Lier Chemical Co, you can compare the effects of market volatilities on Tianshui Huatian and Lier Chemical 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 Tianshui Huatian with a short position of Lier Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshui Huatian and Lier Chemical.
Diversification Opportunities for Tianshui Huatian and Lier Chemical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianshui and Lier is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Tianshui Huatian Technology and Lier Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lier Chemical and Tianshui Huatian 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 Tianshui Huatian Technology are associated (or correlated) with Lier Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lier Chemical has no effect on the direction of Tianshui Huatian i.e., Tianshui Huatian and Lier Chemical go up and down completely randomly.
Pair Corralation between Tianshui Huatian and Lier Chemical
Assuming the 90 days trading horizon Tianshui Huatian Technology is expected to under-perform the Lier Chemical. In addition to that, Tianshui Huatian is 1.8 times more volatile than Lier Chemical Co. It trades about -0.13 of its total potential returns per unit of risk. Lier Chemical Co is currently generating about -0.13 per unit of volatility. If you would invest 856.00 in Lier Chemical Co on October 21, 2024 and sell it today you would lose (36.00) from holding Lier Chemical Co or give up 4.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianshui Huatian Technology vs. Lier Chemical Co
Performance |
| Timeline |
| Tianshui Huatian Tec |
| Lier Chemical |
Tianshui Huatian and Lier Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianshui Huatian and Lier Chemical
The main advantage of trading using opposite Tianshui Huatian and Lier Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshui Huatian position performs unexpectedly, Lier Chemical 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 Lier Chemical will offset losses from the drop in Lier Chemical's long position.| Tianshui Huatian vs. Qingdao Foods Co | Tianshui Huatian vs. Xiamen Jihong Package | Tianshui Huatian vs. Youyou Foods Co | Tianshui Huatian vs. Beijing Sanyuan Foods |
| Lier Chemical vs. Chenzhou Jingui Silver | Lier Chemical vs. China Everbright Bank | Lier Chemical vs. Lecron Energy Saving | Lier Chemical vs. Western Mining Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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