Correlation Between Contemporary Amperex and Tianjin Hi
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By analyzing existing cross correlation between Contemporary Amperex Technology and Tianjin Hi Tech Development, you can compare the effects of market volatilities on Contemporary Amperex and Tianjin Hi 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 Contemporary Amperex with a short position of Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contemporary Amperex and Tianjin Hi.
Diversification Opportunities for Contemporary Amperex and Tianjin Hi
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Contemporary and Tianjin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Contemporary Amperex Technolog and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech and Contemporary Amperex 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 Contemporary Amperex Technology are associated (or correlated) with Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of Contemporary Amperex i.e., Contemporary Amperex and Tianjin Hi go up and down completely randomly.
Pair Corralation between Contemporary Amperex and Tianjin Hi
Assuming the 90 days trading horizon Contemporary Amperex Technology is expected to generate 0.9 times more return on investment than Tianjin Hi. However, Contemporary Amperex Technology is 1.12 times less risky than Tianjin Hi. It trades about 0.05 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.01 per unit of risk. If you would invest 19,081 in Contemporary Amperex Technology on August 25, 2024 and sell it today you would earn a total of 6,829 from holding Contemporary Amperex Technology or generate 35.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contemporary Amperex Technolog vs. Tianjin Hi Tech Development
Performance |
| Timeline |
| Contemporary Amperex |
| Tianjin Hi Tech |
Contemporary Amperex and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contemporary Amperex and Tianjin Hi
The main advantage of trading using opposite Contemporary Amperex and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contemporary Amperex position performs unexpectedly, Tianjin Hi 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 Hi will offset losses from the drop in Tianjin Hi's long position.The idea behind Contemporary Amperex Technology and Tianjin Hi Tech Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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