Correlation Between Tianjin Hi and Nanning Chemical
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Nanning Chemical Industry, you can compare the effects of market volatilities on Tianjin Hi and Nanning 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 with a short position of Nanning Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Nanning Chemical.
Diversification Opportunities for Tianjin Hi and Nanning Chemical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianjin and Nanning is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Nanning Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanning Chemical Industry 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 Nanning Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanning Chemical Industry has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Nanning Chemical go up and down completely randomly.
Pair Corralation between Tianjin Hi and Nanning Chemical
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to under-perform the Nanning Chemical. In addition to that, Tianjin Hi is 1.41 times more volatile than Nanning Chemical Industry. It trades about -0.01 of its total potential returns per unit of risk. Nanning Chemical Industry is currently generating about 0.0 per unit of volatility. If you would invest 1,787 in Nanning Chemical Industry on October 26, 2024 and sell it today you would lose (30.00) from holding Nanning Chemical Industry or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. Nanning Chemical Industry
Performance |
| Timeline |
| Tianjin Hi Tech |
| Nanning Chemical Industry |
Tianjin Hi and Nanning Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Nanning Chemical
The main advantage of trading using opposite Tianjin Hi and Nanning Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Nanning 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 Nanning Chemical will offset losses from the drop in Nanning Chemical's long position.| Tianjin Hi vs. Beijing Mainstreets Investment | Tianjin Hi vs. Shandong Polymer Biochemicals | Tianjin Hi vs. Zhongrun Resources Investment | Tianjin Hi vs. Shenzhen Noposion Agrochemicals |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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