Correlation Between Tianjin Pengling and Shanghai Broadband
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By analyzing existing cross correlation between Tianjin Pengling Rubber and Shanghai Broadband Technology, you can compare the effects of market volatilities on Tianjin Pengling and Shanghai Broadband 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 Tianjin Pengling with a short position of Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Pengling and Shanghai Broadband.
Diversification Opportunities for Tianjin Pengling and Shanghai Broadband
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianjin and Shanghai is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Pengling Rubber and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband and Tianjin Pengling 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 Tianjin Pengling Rubber are associated (or correlated) with Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Tianjin Pengling i.e., Tianjin Pengling and Shanghai Broadband go up and down completely randomly.
Pair Corralation between Tianjin Pengling and Shanghai Broadband
Assuming the 90 days trading horizon Tianjin Pengling Rubber is expected to under-perform the Shanghai Broadband. But the stock apears to be less risky and, when comparing its historical volatility, Tianjin Pengling Rubber is 1.17 times less risky than Shanghai Broadband. The stock trades about -0.05 of its potential returns per unit of risk. The Shanghai Broadband Technology is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 263.00 in Shanghai Broadband Technology on October 15, 2024 and sell it today you would earn a total of 51.00 from holding Shanghai Broadband Technology or generate 19.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Pengling Rubber vs. Shanghai Broadband Technology
Performance |
| Timeline |
| Tianjin Pengling Rubber |
| Shanghai Broadband |
Tianjin Pengling and Shanghai Broadband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Pengling and Shanghai Broadband
The main advantage of trading using opposite Tianjin Pengling and Shanghai Broadband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Pengling position performs unexpectedly, Shanghai Broadband 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 Shanghai Broadband will offset losses from the drop in Shanghai Broadband's long position.| Tianjin Pengling vs. Anhui Tongguan Copper | Tianjin Pengling vs. Western Metal Materials | Tianjin Pengling vs. ZYF Lopsking Aluminum | Tianjin Pengling vs. Zhejiang Yongjin Metal |
| Shanghai Broadband vs. Lootom Telcovideo Network | Shanghai Broadband vs. Jiangxi Hengda Hi Tech | Shanghai Broadband vs. Citic Guoan Wine | Shanghai Broadband vs. State Grid InformationCommunication |
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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