Correlation Between Tianjin Hi-Tech and North Chemical
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By analyzing existing cross correlation between Tianjin Hi Tech Development and North Chemical Industries, you can compare the effects of market volatilities on Tianjin Hi-Tech and North Chemical 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 Tianjin Hi-Tech with a short position of North Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi-Tech and North Chemical.
Diversification Opportunities for Tianjin Hi-Tech and North Chemical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and North is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and North Chemical Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North Chemical Industries and Tianjin Hi-Tech 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 Tianjin Hi Tech Development are associated (or correlated) with North Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North Chemical Industries has no effect on the direction of Tianjin Hi-Tech i.e., Tianjin Hi-Tech and North Chemical go up and down completely randomly.
Pair Corralation between Tianjin Hi-Tech and North Chemical
Assuming the 90 days trading horizon Tianjin Hi-Tech is expected to generate 2.44 times less return on investment than North Chemical. But when comparing it to its historical volatility, Tianjin Hi Tech Development is 1.57 times less risky than North Chemical. It trades about 0.14 of its potential returns per unit of risk. North Chemical Industries is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 926.00 in North Chemical Industries on December 4, 2024 and sell it today you would earn a total of 79.00 from holding North Chemical Industries or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. North Chemical Industries
Performance |
| Timeline |
| Tianjin Hi Tech |
| North Chemical Industries |
Tianjin Hi-Tech and North Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi-Tech and North Chemical
The main advantage of trading using opposite Tianjin Hi-Tech and North Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi-Tech position performs unexpectedly, North Chemical 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 North Chemical will offset losses from the drop in North Chemical's long position.| Tianjin Hi-Tech vs. Namchow Food Group | Tianjin Hi-Tech vs. Hengyi Petrochemical Co | Tianjin Hi-Tech vs. Anji Foodstuff Co | Tianjin Hi-Tech vs. Jilin Chemical Fibre |
| North Chemical vs. Northking Information Technology | North Chemical vs. Shenzhen Silver Basis | North Chemical vs. Chongqing Brewery Co | North Chemical vs. Sinocelltech 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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