Correlation Between Shengyuan Environmental and Tianjin Capital
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By analyzing existing cross correlation between Shengyuan Environmental Protection and Tianjin Capital Environmental, you can compare the effects of market volatilities on Shengyuan Environmental and Tianjin Capital 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 Shengyuan Environmental with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shengyuan Environmental and Tianjin Capital.
Diversification Opportunities for Shengyuan Environmental and Tianjin Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shengyuan and Tianjin is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shengyuan Environmental Protec and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi and Shengyuan Environmental 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 Shengyuan Environmental Protection are associated (or correlated) with Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Shengyuan Environmental i.e., Shengyuan Environmental and Tianjin Capital go up and down completely randomly.
Pair Corralation between Shengyuan Environmental and Tianjin Capital
Assuming the 90 days trading horizon Shengyuan Environmental Protection is expected to generate 1.44 times more return on investment than Tianjin Capital. However, Shengyuan Environmental is 1.44 times more volatile than Tianjin Capital Environmental. It trades about -0.03 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.09 per unit of risk. If you would invest 1,416 in Shengyuan Environmental Protection on August 28, 2024 and sell it today you would lose (28.00) from holding Shengyuan Environmental Protection or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shengyuan Environmental Protec vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Shengyuan Environmental |
| Tianjin Capital Envi |
Shengyuan Environmental and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shengyuan Environmental and Tianjin Capital
The main advantage of trading using opposite Shengyuan Environmental and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shengyuan Environmental position performs unexpectedly, Tianjin Capital 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 Capital will offset losses from the drop in Tianjin Capital's long position.| Shengyuan Environmental vs. China Petroleum Chemical | Shengyuan Environmental vs. PetroChina Co Ltd | Shengyuan Environmental vs. China State Construction | Shengyuan Environmental vs. China Railway Group |
| Tianjin Capital vs. China Petroleum Chemical | Tianjin Capital vs. PetroChina Co Ltd | Tianjin Capital vs. China State Construction | Tianjin Capital vs. China Railway Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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