Correlation Between Tianjin Hi and Beijing HuaYuanYiTong
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Beijing HuaYuanYiTong Thermal, you can compare the effects of market volatilities on Tianjin Hi and Beijing HuaYuanYiTong 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 with a short position of Beijing HuaYuanYiTong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Beijing HuaYuanYiTong.
Diversification Opportunities for Tianjin Hi and Beijing HuaYuanYiTong
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Beijing is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Beijing HuaYuanYiTong Thermal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing HuaYuanYiTong and Tianjin Hi 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 Beijing HuaYuanYiTong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing HuaYuanYiTong has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Beijing HuaYuanYiTong go up and down completely randomly.
Pair Corralation between Tianjin Hi and Beijing HuaYuanYiTong
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to generate 1.36 times more return on investment than Beijing HuaYuanYiTong. However, Tianjin Hi is 1.36 times more volatile than Beijing HuaYuanYiTong Thermal. It trades about 0.01 of its potential returns per unit of risk. Beijing HuaYuanYiTong Thermal is currently generating about -0.08 per unit of risk. If you would invest 290.00 in Tianjin Hi Tech Development on November 6, 2024 and sell it today you would lose (4.00) from holding Tianjin Hi Tech Development or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. Beijing HuaYuanYiTong Thermal
Performance |
| Timeline |
| Tianjin Hi Tech |
| Beijing HuaYuanYiTong |
Tianjin Hi and Beijing HuaYuanYiTong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Beijing HuaYuanYiTong
The main advantage of trading using opposite Tianjin Hi and Beijing HuaYuanYiTong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Beijing HuaYuanYiTong 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 Beijing HuaYuanYiTong will offset losses from the drop in Beijing HuaYuanYiTong's long position.| Tianjin Hi vs. Jointo Energy Investment | Tianjin Hi vs. Shanghai Material Trading | Tianjin Hi vs. Shenzhen Centralcon Investment | Tianjin Hi vs. Cultural Investment Holdings |
| Beijing HuaYuanYiTong vs. Jiangxi Naipu Mining | Beijing HuaYuanYiTong vs. NBTM New Materials | Beijing HuaYuanYiTong vs. Jinhui Mining Co | Beijing HuaYuanYiTong vs. GRIPM Advanced Materials |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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