Correlation Between Aba Chemicals and Tongding Interconnection
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By analyzing existing cross correlation between Aba Chemicals Corp and Tongding Interconnection Information, you can compare the effects of market volatilities on Aba Chemicals and Tongding Interconnection 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 Aba Chemicals with a short position of Tongding Interconnection. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Tongding Interconnection.
Diversification Opportunities for Aba Chemicals and Tongding Interconnection
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aba and Tongding is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp and Tongding Interconnection Infor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongding Interconnection and Aba Chemicals 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 Aba Chemicals Corp are associated (or correlated) with Tongding Interconnection. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongding Interconnection has no effect on the direction of Aba Chemicals i.e., Aba Chemicals and Tongding Interconnection go up and down completely randomly.
Pair Corralation between Aba Chemicals and Tongding Interconnection
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to generate 1.45 times more return on investment than Tongding Interconnection. However, Aba Chemicals is 1.45 times more volatile than Tongding Interconnection Information. It trades about 0.01 of its potential returns per unit of risk. Tongding Interconnection Information is currently generating about -0.01 per unit of risk. If you would invest 891.00 in Aba Chemicals Corp on September 12, 2024 and sell it today you would lose (77.00) from holding Aba Chemicals Corp or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aba Chemicals Corp vs. Tongding Interconnection Infor
Performance |
| Timeline |
| Aba Chemicals Corp |
| Tongding Interconnection |
Aba Chemicals and Tongding Interconnection Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aba Chemicals and Tongding Interconnection
The main advantage of trading using opposite Aba Chemicals and Tongding Interconnection positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals position performs unexpectedly, Tongding Interconnection 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 Tongding Interconnection will offset losses from the drop in Tongding Interconnection's long position.| Aba Chemicals vs. Semiconductor Manufacturing Electronics | Aba Chemicals vs. GigaDevice SemiconductorBeiji | Aba Chemicals vs. Qinghaihuading Industrial Co | Aba Chemicals vs. MayAir Technology Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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