Correlation Between East Money and Tsinghuatongfang
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By analyzing existing cross correlation between East Money Information and Tsinghuatongfang Co, you can compare the effects of market volatilities on East Money and Tsinghuatongfang 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 East Money with a short position of Tsinghuatongfang. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Money and Tsinghuatongfang.
Diversification Opportunities for East Money and Tsinghuatongfang
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and Tsinghuatongfang is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Money Information and Tsinghuatongfang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsinghuatongfang and East Money 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 East Money Information are associated (or correlated) with Tsinghuatongfang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsinghuatongfang has no effect on the direction of East Money i.e., East Money and Tsinghuatongfang go up and down completely randomly.
Pair Corralation between East Money and Tsinghuatongfang
Assuming the 90 days trading horizon East Money is expected to generate 3.05 times less return on investment than Tsinghuatongfang. In addition to that, East Money is 1.39 times more volatile than Tsinghuatongfang Co. It trades about 0.05 of its total potential returns per unit of risk. Tsinghuatongfang Co is currently generating about 0.22 per unit of volatility. If you would invest 632.00 in Tsinghuatongfang Co on November 7, 2024 and sell it today you would earn a total of 44.00 from holding Tsinghuatongfang Co or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Money Information vs. Tsinghuatongfang Co
Performance |
| Timeline |
| East Money Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tsinghuatongfang |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
East Money and Tsinghuatongfang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Money and Tsinghuatongfang
The main advantage of trading using opposite East Money and Tsinghuatongfang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Money position performs unexpectedly, Tsinghuatongfang 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 Tsinghuatongfang will offset losses from the drop in Tsinghuatongfang's long position.The idea behind East Money Information and Tsinghuatongfang 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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