Correlation Between Xinjiang Beixin and Tianjin Realty
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By analyzing existing cross correlation between Xinjiang Beixin RoadBridge and Tianjin Realty Development, you can compare the effects of market volatilities on Xinjiang Beixin and Tianjin Realty 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 Xinjiang Beixin with a short position of Tianjin Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Beixin and Tianjin Realty.
Diversification Opportunities for Xinjiang Beixin and Tianjin Realty
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xinjiang and Tianjin is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Beixin RoadBridge and Tianjin Realty Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Realty Devel and Xinjiang Beixin 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 Xinjiang Beixin RoadBridge are associated (or correlated) with Tianjin Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Realty Devel has no effect on the direction of Xinjiang Beixin i.e., Xinjiang Beixin and Tianjin Realty go up and down completely randomly.
Pair Corralation between Xinjiang Beixin and Tianjin Realty
Assuming the 90 days trading horizon Xinjiang Beixin RoadBridge is expected to under-perform the Tianjin Realty. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Beixin RoadBridge is 1.43 times less risky than Tianjin Realty. The stock trades about -0.48 of its potential returns per unit of risk. The Tianjin Realty Development is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Tianjin Realty Development on October 25, 2024 and sell it today you would lose (57.00) from holding Tianjin Realty Development or give up 20.96% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Xinjiang Beixin RoadBridge vs. Tianjin Realty Development
Performance |
Timeline |
Xinjiang Beixin Road |
Tianjin Realty Devel |
Xinjiang Beixin and Tianjin Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Xinjiang Beixin and Tianjin Realty
The main advantage of trading using opposite Xinjiang Beixin and Tianjin Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Beixin position performs unexpectedly, Tianjin Realty 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 Realty will offset losses from the drop in Tianjin Realty's long position.Xinjiang Beixin vs. CSSC Offshore Marine | Xinjiang Beixin vs. Chongqing Changan Automobile | Xinjiang Beixin vs. Tianjin Silvery Dragon | Xinjiang Beixin vs. Shenzhen Silver Basis |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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