Correlation Between Tianjin Hi and Chongqing Road
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Chongqing Road Bridge, you can compare the effects of market volatilities on Tianjin Hi and Chongqing Road 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 Chongqing Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Chongqing Road.
Diversification Opportunities for Tianjin Hi and Chongqing Road
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Chongqing is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Chongqing Road Bridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Road Bridge 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 Chongqing Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Road Bridge has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Chongqing Road go up and down completely randomly.
Pair Corralation between Tianjin Hi and Chongqing Road
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to under-perform the Chongqing Road. But the stock apears to be less risky and, when comparing its historical volatility, Tianjin Hi Tech Development is 1.07 times less risky than Chongqing Road. The stock trades about -0.01 of its potential returns per unit of risk. The Chongqing Road Bridge is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 486.00 in Chongqing Road Bridge on October 16, 2024 and sell it today you would earn a total of 31.00 from holding Chongqing Road Bridge or generate 6.38% 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. Chongqing Road Bridge
Performance |
| Timeline |
| Tianjin Hi Tech |
| Chongqing Road Bridge |
Tianjin Hi and Chongqing Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Chongqing Road
The main advantage of trading using opposite Tianjin Hi and Chongqing Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Chongqing Road 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 Chongqing Road will offset losses from the drop in Chongqing Road's long position.| Tianjin Hi vs. China Mobile Limited | Tianjin Hi vs. Lootom Telcovideo Network | Tianjin Hi vs. State Grid InformationCommunication | Tianjin Hi vs. Shenzhen Topway Video |
| Chongqing Road vs. Sunwave Communications Co | Chongqing Road vs. Gansu Huangtai Wine marketing | Chongqing Road vs. Unisplendour Corp | Chongqing Road vs. Tianjin Hi Tech Development |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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