Correlation Between Shandong Rike and Tianjin Realty
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By analyzing existing cross correlation between Shandong Rike Chemical and Tianjin Realty Development, you can compare the effects of market volatilities on Shandong Rike and Tianjin Realty 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 Shandong Rike with a short position of Tianjin Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Rike and Tianjin Realty.
Diversification Opportunities for Shandong Rike and Tianjin Realty
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and Tianjin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Rike Chemical and Tianjin Realty Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Realty Devel and Shandong Rike 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 Shandong Rike Chemical are associated (or correlated) with Tianjin Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Realty Devel has no effect on the direction of Shandong Rike i.e., Shandong Rike and Tianjin Realty go up and down completely randomly.
Pair Corralation between Shandong Rike and Tianjin Realty
Assuming the 90 days trading horizon Shandong Rike is expected to generate 4.79 times less return on investment than Tianjin Realty. But when comparing it to its historical volatility, Shandong Rike Chemical is 1.41 times less risky than Tianjin Realty. It trades about 0.03 of its potential returns per unit of risk. Tianjin Realty Development is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Tianjin Realty Development on October 25, 2024 and sell it today you would earn a total of 86.00 from holding Tianjin Realty Development or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Rike Chemical vs. Tianjin Realty Development
Performance |
| Timeline |
| Shandong Rike Chemical |
| Tianjin Realty Devel |
Shandong Rike and Tianjin Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Rike and Tianjin Realty
The main advantage of trading using opposite Shandong Rike and Tianjin Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Rike position performs unexpectedly, Tianjin Realty 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 Tianjin Realty will offset losses from the drop in Tianjin Realty's long position.| Shandong Rike vs. Zijin Mining Group | Shandong Rike vs. Wanhua Chemical Group | Shandong Rike vs. Baoshan Iron Steel | Shandong Rike vs. Rongsheng Petrochemical Co |
| Tianjin Realty vs. Luolai Home Textile | Tianjin Realty vs. Xiamen Goldenhome Co | Tianjin Realty vs. Fujian Longzhou Transportation | Tianjin Realty vs. Markor International Home |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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