Correlation Between Tongxing Environmental and Hangzhou Guotai
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By analyzing existing cross correlation between Tongxing Environmental Protection and Hangzhou Guotai Environmental, you can compare the effects of market volatilities on Tongxing Environmental and Hangzhou Guotai 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 Hangzhou Guotai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tongxing Environmental and Hangzhou Guotai.
Diversification Opportunities for Tongxing Environmental and Hangzhou Guotai
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tongxing and Hangzhou is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tongxing Environmental Protect and Hangzhou Guotai Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hangzhou Guotai Envi 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 Hangzhou Guotai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hangzhou Guotai Envi has no effect on the direction of Tongxing Environmental i.e., Tongxing Environmental and Hangzhou Guotai go up and down completely randomly.
Pair Corralation between Tongxing Environmental and Hangzhou Guotai
Assuming the 90 days trading horizon Tongxing Environmental Protection is expected to under-perform the Hangzhou Guotai. But the stock apears to be less risky and, when comparing its historical volatility, Tongxing Environmental Protection is 1.12 times less risky than Hangzhou Guotai. The stock trades about -0.03 of its potential returns per unit of risk. The Hangzhou Guotai Environmental is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,590 in Hangzhou Guotai Environmental on November 5, 2024 and sell it today you would lose (420.00) from holding Hangzhou Guotai Environmental or give up 11.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.68% |
| Values | Daily Returns |
Tongxing Environmental Protect vs. Hangzhou Guotai Environmental
Performance |
| Timeline |
| Tongxing Environmental |
| Hangzhou Guotai Envi |
Tongxing Environmental and Hangzhou Guotai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tongxing Environmental and Hangzhou Guotai
The main advantage of trading using opposite Tongxing Environmental and Hangzhou Guotai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tongxing Environmental position performs unexpectedly, Hangzhou Guotai 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 Hangzhou Guotai will offset losses from the drop in Hangzhou Guotai's long position.| Tongxing Environmental vs. Industrial and Commercial | Tongxing Environmental vs. Agricultural Bank of | Tongxing Environmental vs. China Construction Bank | Tongxing Environmental vs. Bank of China |
| Hangzhou Guotai vs. Advanced Technology Materials | Hangzhou Guotai vs. GreenTech Environmental Co | Hangzhou Guotai vs. Malion New Materials | Hangzhou Guotai vs. Guangdong Liantai Environmental |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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