Correlation Between Hubei Forbon and Tianjin Silvery
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By analyzing existing cross correlation between Hubei Forbon Technology and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Hubei Forbon and Tianjin Silvery 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 Hubei Forbon with a short position of Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and Tianjin Silvery.
Diversification Opportunities for Hubei Forbon and Tianjin Silvery
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hubei and Tianjin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and Tianjin Silvery go up and down completely randomly.
Pair Corralation between Hubei Forbon and Tianjin Silvery
Assuming the 90 days trading horizon Hubei Forbon Technology is expected to generate 1.26 times more return on investment than Tianjin Silvery. However, Hubei Forbon is 1.26 times more volatile than Tianjin Silvery Dragon. It trades about 0.08 of its potential returns per unit of risk. Tianjin Silvery Dragon is currently generating about 0.09 per unit of risk. If you would invest 620.00 in Hubei Forbon Technology on September 27, 2024 and sell it today you would earn a total of 182.00 from holding Hubei Forbon Technology or generate 29.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Forbon Technology vs. Tianjin Silvery Dragon
Performance |
| Timeline |
| Hubei Forbon Technology |
| Tianjin Silvery Dragon |
Hubei Forbon and Tianjin Silvery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Forbon and Tianjin Silvery
The main advantage of trading using opposite Hubei Forbon and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, Tianjin Silvery 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 Silvery will offset losses from the drop in Tianjin Silvery's long position.| Hubei Forbon vs. Zijin Mining Group | Hubei Forbon vs. Wanhua Chemical Group | Hubei Forbon vs. Baoshan Iron Steel | Hubei Forbon vs. Shandong Gold Mining |
| Tianjin Silvery vs. Wanhua Chemical Group | Tianjin Silvery vs. Shandong Gold Mining | Tianjin Silvery vs. Rongsheng Petrochemical Co | Tianjin Silvery vs. Inner Mongolia BaoTou |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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