Correlation Between Tianshui Huatian and ISoftStone Information
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By analyzing existing cross correlation between Tianshui Huatian Technology and iSoftStone Information Technology, you can compare the effects of market volatilities on Tianshui Huatian and ISoftStone Information 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 ISoftStone Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshui Huatian and ISoftStone Information.
Diversification Opportunities for Tianshui Huatian and ISoftStone Information
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianshui and ISoftStone is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tianshui Huatian Technology and iSoftStone Information Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSoftStone Information 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 ISoftStone Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSoftStone Information has no effect on the direction of Tianshui Huatian i.e., Tianshui Huatian and ISoftStone Information go up and down completely randomly.
Pair Corralation between Tianshui Huatian and ISoftStone Information
Assuming the 90 days trading horizon Tianshui Huatian is expected to generate 5.61 times less return on investment than ISoftStone Information. But when comparing it to its historical volatility, Tianshui Huatian Technology is 2.02 times less risky than ISoftStone Information. It trades about 0.02 of its potential returns per unit of risk. iSoftStone Information Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,505 in iSoftStone Information Technology on December 4, 2024 and sell it today you would earn a total of 3,976 from holding iSoftStone Information Technology or generate 158.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Tianshui Huatian Technology vs. iSoftStone Information Technol
Performance |
| Timeline |
| Tianshui Huatian Tec |
| iSoftStone Information |
Tianshui Huatian and ISoftStone Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianshui Huatian and ISoftStone Information
The main advantage of trading using opposite Tianshui Huatian and ISoftStone Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshui Huatian position performs unexpectedly, ISoftStone Information 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 ISoftStone Information will offset losses from the drop in ISoftStone Information's long position.| Tianshui Huatian vs. Suzhou Industrial Park | Tianshui Huatian vs. Yili Chuanning Biotechnology | Tianshui Huatian vs. Jiangsu GDK Biotechnology | Tianshui Huatian vs. Yoantion Industrial IncLtd |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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