Correlation Between Shandong Iron and Tianshui Huatian
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By analyzing existing cross correlation between Shandong Iron and and Tianshui Huatian Technology, you can compare the effects of market volatilities on Shandong Iron and Tianshui Huatian 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 Iron with a short position of Tianshui Huatian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Iron and Tianshui Huatian.
Diversification Opportunities for Shandong Iron and Tianshui Huatian
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Tianshui is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Iron and and Tianshui Huatian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshui Huatian Tec and Shandong Iron 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 Iron and are associated (or correlated) with Tianshui Huatian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshui Huatian Tec has no effect on the direction of Shandong Iron i.e., Shandong Iron and Tianshui Huatian go up and down completely randomly.
Pair Corralation between Shandong Iron and Tianshui Huatian
Assuming the 90 days trading horizon Shandong Iron and is expected to under-perform the Tianshui Huatian. But the stock apears to be less risky and, when comparing its historical volatility, Shandong Iron and is 1.35 times less risky than Tianshui Huatian. The stock trades about -0.34 of its potential returns per unit of risk. The Tianshui Huatian Technology is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,180 in Tianshui Huatian Technology on October 17, 2024 and sell it today you would lose (54.00) from holding Tianshui Huatian Technology or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Iron and vs. Tianshui Huatian Technology
Performance |
| Timeline |
| Shandong Iron |
| Tianshui Huatian Tec |
Shandong Iron and Tianshui Huatian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Iron and Tianshui Huatian
The main advantage of trading using opposite Shandong Iron and Tianshui Huatian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Iron position performs unexpectedly, Tianshui Huatian 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 Tianshui Huatian will offset losses from the drop in Tianshui Huatian's long position.| Shandong Iron vs. Caihong Display Devices | Shandong Iron vs. Shenzhen Kexin Communication | Shandong Iron vs. China Satellite Communications | Shandong Iron vs. Guangzhou Seagull Kitchen |
| Tianshui Huatian vs. Tongxing Environmental Protection | Tianshui Huatian vs. Central Plains Environment | Tianshui Huatian vs. XinJiang GuoTong Pipeline | Tianshui Huatian vs. Shandong Iron and |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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