Correlation Between Tianshan Aluminum and Sinofibers Technology
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By analyzing existing cross correlation between Tianshan Aluminum Group and Sinofibers Technology Co, you can compare the effects of market volatilities on Tianshan Aluminum and Sinofibers Technology 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 Tianshan Aluminum with a short position of Sinofibers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshan Aluminum and Sinofibers Technology.
Diversification Opportunities for Tianshan Aluminum and Sinofibers Technology
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tianshan and Sinofibers is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tianshan Aluminum Group and Sinofibers Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinofibers Technology and Tianshan Aluminum 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 Tianshan Aluminum Group are associated (or correlated) with Sinofibers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinofibers Technology has no effect on the direction of Tianshan Aluminum i.e., Tianshan Aluminum and Sinofibers Technology go up and down completely randomly.
Pair Corralation between Tianshan Aluminum and Sinofibers Technology
Assuming the 90 days trading horizon Tianshan Aluminum Group is expected to generate 0.97 times more return on investment than Sinofibers Technology. However, Tianshan Aluminum Group is 1.03 times less risky than Sinofibers Technology. It trades about 0.48 of its potential returns per unit of risk. Sinofibers Technology Co is currently generating about 0.15 per unit of risk. If you would invest 792.00 in Tianshan Aluminum Group on November 7, 2024 and sell it today you would earn a total of 121.00 from holding Tianshan Aluminum Group or generate 15.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianshan Aluminum Group vs. Sinofibers Technology Co
Performance |
| Timeline |
| Tianshan Aluminum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Sinofibers Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tianshan Aluminum and Sinofibers Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianshan Aluminum and Sinofibers Technology
The main advantage of trading using opposite Tianshan Aluminum and Sinofibers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshan Aluminum position performs unexpectedly, Sinofibers Technology 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 Sinofibers Technology will offset losses from the drop in Sinofibers Technology's long position.The idea behind Tianshan Aluminum Group and Sinofibers Technology Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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