Correlation Between Tongxing Environmental and Guangdong Tianhe
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By analyzing existing cross correlation between Tongxing Environmental Protection and Guangdong Tianhe Agricultural, you can compare the effects of market volatilities on Tongxing Environmental and Guangdong Tianhe 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 Tongxing Environmental with a short position of Guangdong Tianhe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and Guangdong Tianhe.
Diversification Opportunities for Tongxing Environmental and Guangdong Tianhe
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tongxing and Guangdong is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect and Guangdong Tianhe Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Tianhe Agr and Tongxing Environmental 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 Tongxing Environmental Protection are associated (or correlated) with Guangdong Tianhe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Tianhe Agr has no effect on the direction of Tongxing Environmental i.e., Tongxing Environmental and Guangdong Tianhe go up and down completely randomly.
Pair Corralation between Tongxing Environmental and Guangdong Tianhe
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to generate 1.13 times more return on investment than Guangdong Tianhe. However, Tongxing Environmental is 1.13 times more volatile than Guangdong Tianhe Agricultural. It trades about -0.29 of its potential returns per unit of risk. Guangdong Tianhe Agricultural is currently generating about -0.34 per unit of risk. If you would invest 1,699 in Tongxing Environmental Protection on October 14, 2024 and sell it today you would lose (328.00) from holding Tongxing Environmental Protection or give up 19.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. Guangdong Tianhe Agricultural
Performance |
| Timeline |
| Tongxing Environmental |
| Guangdong Tianhe Agr |
Tongxing Environmental and Guangdong Tianhe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and Guangdong Tianhe
The main advantage of trading using opposite Tongxing Environmental and Guangdong Tianhe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental position performs unexpectedly, Guangdong Tianhe 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 Guangdong Tianhe will offset losses from the drop in Guangdong Tianhe's long position.| Tongxing Environmental vs. Uroica Mining Safety | Tongxing Environmental vs. Huayi Brothers Media | Tongxing Environmental vs. JCHX Mining Management | Tongxing Environmental vs. Thinkingdom Media Group |
| Guangdong Tianhe vs. Epoxy Base Electronic | Guangdong Tianhe vs. Eit Environmental Development | Guangdong Tianhe vs. Fujian Nanwang Environment | Guangdong Tianhe vs. Tongxing Environmental Protection |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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