Correlation Between Shandong Sanyuan and Tianjin Capital
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By analyzing existing cross correlation between Shandong Sanyuan Biotechnology and Tianjin Capital Environmental, you can compare the effects of market volatilities on Shandong Sanyuan 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 Shandong Sanyuan with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Sanyuan and Tianjin Capital.
Diversification Opportunities for Shandong Sanyuan and Tianjin Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Tianjin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Sanyuan Biotechnology 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 Shandong Sanyuan 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 Shandong Sanyuan Biotechnology 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 Shandong Sanyuan i.e., Shandong Sanyuan and Tianjin Capital go up and down completely randomly.
Pair Corralation between Shandong Sanyuan and Tianjin Capital
Assuming the 90 days trading horizon Shandong Sanyuan Biotechnology is expected to under-perform the Tianjin Capital. In addition to that, Shandong Sanyuan is 1.87 times more volatile than Tianjin Capital Environmental. It trades about -0.27 of its total potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.4 per unit of volatility. If you would invest 620.00 in Tianjin Capital Environmental on October 12, 2024 and sell it today you would lose (63.00) from holding Tianjin Capital Environmental or give up 10.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Sanyuan Biotechnology vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Shandong Sanyuan Bio |
| Tianjin Capital Envi |
Shandong Sanyuan and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Sanyuan and Tianjin Capital
The main advantage of trading using opposite Shandong Sanyuan and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Sanyuan 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.| Shandong Sanyuan vs. Jinlong Machinery Electronic | Shandong Sanyuan vs. Dhc Software Co | Shandong Sanyuan vs. Hubei Xingfa Chemicals | Shandong Sanyuan vs. Sinofibers Technology Co |
| Tianjin Capital vs. Shandong Polymer Biochemicals | Tianjin Capital vs. Wuhan Hvsen Biotechnology | Tianjin Capital vs. Shandong Sanyuan Biotechnology | Tianjin Capital vs. Beijing YanDong MicroElectronic |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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