Correlation Between Tianjin Hi and Liuzhou Chemical
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Liuzhou Chemical Industry, you can compare the effects of market volatilities on Tianjin Hi and Liuzhou 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 Liuzhou Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Liuzhou Chemical.
Diversification Opportunities for Tianjin Hi and Liuzhou Chemical
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Liuzhou is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Liuzhou Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liuzhou 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 Liuzhou Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liuzhou Chemical Industry has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Liuzhou Chemical go up and down completely randomly.
Pair Corralation between Tianjin Hi and Liuzhou Chemical
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to generate 1.3 times more return on investment than Liuzhou Chemical. However, Tianjin Hi is 1.3 times more volatile than Liuzhou Chemical Industry. It trades about 0.06 of its potential returns per unit of risk. Liuzhou Chemical Industry is currently generating about 0.06 per unit of risk. If you would invest 208.00 in Tianjin Hi Tech Development on October 13, 2024 and sell it today you would earn a total of 49.00 from holding Tianjin Hi Tech Development or generate 23.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. Liuzhou Chemical Industry
Performance |
| Timeline |
| Tianjin Hi Tech |
| Liuzhou Chemical Industry |
Tianjin Hi and Liuzhou Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Liuzhou Chemical
The main advantage of trading using opposite Tianjin Hi and Liuzhou Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Liuzhou 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 Liuzhou Chemical will offset losses from the drop in Liuzhou Chemical's long position.| Tianjin Hi vs. Shuhua Sports Co | Tianjin Hi vs. Jiangsu Jinling Sports | Tianjin Hi vs. Changchun Engley Automobile | Tianjin Hi vs. Masterwork Machinery |
| Liuzhou Chemical vs. Tianjin Hi Tech Development | Liuzhou Chemical vs. Shanghai Shibei Hi Tech | Liuzhou Chemical vs. China Publishing Media | Liuzhou Chemical vs. Zhejiang JIULI Hi tech |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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