Correlation Between North Chemical and Tianjin Hi
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By analyzing existing cross correlation between North Chemical Industries and Tianjin Hi Tech Development, you can compare the effects of market volatilities on North Chemical and Tianjin Hi 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 North Chemical with a short position of Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Chemical and Tianjin Hi.
Diversification Opportunities for North Chemical and Tianjin Hi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between North and Tianjin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding North Chemical Industries and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech and North Chemical 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 North Chemical Industries are associated (or correlated) with Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of North Chemical i.e., North Chemical and Tianjin Hi go up and down completely randomly.
Pair Corralation between North Chemical and Tianjin Hi
Assuming the 90 days trading horizon North Chemical is expected to generate 2.36 times less return on investment than Tianjin Hi. In addition to that, North Chemical is 1.03 times more volatile than Tianjin Hi Tech Development. It trades about 0.08 of its total potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.2 per unit of volatility. If you would invest 254.00 in Tianjin Hi Tech Development on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Tianjin Hi Tech Development or generate 30.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
North Chemical Industries vs. Tianjin Hi Tech Development
Performance |
| Timeline |
| North Chemical Industries |
| Tianjin Hi Tech |
North Chemical and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Chemical and Tianjin Hi
The main advantage of trading using opposite North Chemical and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Chemical position performs unexpectedly, Tianjin Hi 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 Tianjin Hi will offset losses from the drop in Tianjin Hi's long position.| North Chemical vs. Tianjin Hi Tech Development | North Chemical vs. Guangdong Shenglu Telecommunication | North Chemical vs. Jiangxi Hengda Hi Tech | North Chemical vs. FSPG Hi Tech Co |
| Tianjin Hi vs. Industrial and Commercial | Tianjin Hi vs. Agricultural Bank of | Tianjin Hi vs. China Construction Bank | Tianjin Hi vs. Bank of China |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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