Correlation Between Shenzhen Changfang and Tianjin Realty
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By analyzing existing cross correlation between Shenzhen Changfang Light and Tianjin Realty Development, you can compare the effects of market volatilities on Shenzhen Changfang 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 Shenzhen Changfang with a short position of Tianjin Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Tianjin Realty.
Diversification Opportunities for Shenzhen Changfang and Tianjin Realty
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Tianjin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light 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 Shenzhen Changfang 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 Shenzhen Changfang Light 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 Shenzhen Changfang i.e., Shenzhen Changfang and Tianjin Realty go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Tianjin Realty
Assuming the 90 days trading horizon Shenzhen Changfang is expected to generate 1.85 times less return on investment than Tianjin Realty. But when comparing it to its historical volatility, Shenzhen Changfang Light is 1.11 times less risky than Tianjin Realty. It trades about 0.02 of its potential returns per unit of risk. Tianjin Realty Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Tianjin Realty Development on September 13, 2024 and sell it today you would earn a total of 76.00 from holding Tianjin Realty Development or generate 33.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Shenzhen Changfang Light vs. Tianjin Realty Development
Performance |
| Timeline |
| Shenzhen Changfang Light |
| Tianjin Realty Devel |
Shenzhen Changfang and Tianjin Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Changfang and Tianjin Realty
The main advantage of trading using opposite Shenzhen Changfang and Tianjin Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang 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.| Shenzhen Changfang vs. Kuangda Technology Group | Shenzhen Changfang vs. Xizi Clean Energy | Shenzhen Changfang vs. Beijing Kaiwen Education | Shenzhen Changfang vs. Shandong Publishing Media |
| Tianjin Realty vs. China Life Insurance | Tianjin Realty vs. Cinda Securities Co | Tianjin Realty vs. Piotech Inc A | Tianjin Realty vs. Dongxing Sec 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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