Correlation Between Penghua Shenzhen and Tianshan Aluminum
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By analyzing existing cross correlation between Penghua Shenzhen Energy and Tianshan Aluminum Group, you can compare the effects of market volatilities on Penghua Shenzhen and Tianshan Aluminum 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 Penghua Shenzhen with a short position of Tianshan Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penghua Shenzhen and Tianshan Aluminum.
Diversification Opportunities for Penghua Shenzhen and Tianshan Aluminum
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Penghua and Tianshan is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Penghua Shenzhen Energy and Tianshan Aluminum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshan Aluminum and Penghua Shenzhen 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 Penghua Shenzhen Energy are associated (or correlated) with Tianshan Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshan Aluminum has no effect on the direction of Penghua Shenzhen i.e., Penghua Shenzhen and Tianshan Aluminum go up and down completely randomly.
Pair Corralation between Penghua Shenzhen and Tianshan Aluminum
Assuming the 90 days trading horizon Penghua Shenzhen is expected to generate 5.78 times less return on investment than Tianshan Aluminum. But when comparing it to its historical volatility, Penghua Shenzhen Energy is 2.11 times less risky than Tianshan Aluminum. It trades about 0.01 of its potential returns per unit of risk. Tianshan Aluminum Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 777.00 in Tianshan Aluminum Group on November 19, 2024 and sell it today you would earn a total of 99.00 from holding Tianshan Aluminum Group or generate 12.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penghua Shenzhen Energy vs. Tianshan Aluminum Group
Performance |
| Timeline |
| Penghua Shenzhen Energy |
| Tianshan Aluminum |
Penghua Shenzhen and Tianshan Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penghua Shenzhen and Tianshan Aluminum
The main advantage of trading using opposite Penghua Shenzhen and Tianshan Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penghua Shenzhen position performs unexpectedly, Tianshan Aluminum 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 Tianshan Aluminum will offset losses from the drop in Tianshan Aluminum's long position.| Penghua Shenzhen vs. Ming Yang Smart | Penghua Shenzhen vs. 159681 | Penghua Shenzhen vs. 159005 | Penghua Shenzhen vs. Loctek Ergonomic Technology |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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