Correlation Between Tianjin Hi and Xiamen Goldenhome
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Xiamen Goldenhome Co, you can compare the effects of market volatilities on Tianjin Hi and Xiamen Goldenhome 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 Xiamen Goldenhome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Xiamen Goldenhome.
Diversification Opportunities for Tianjin Hi and Xiamen Goldenhome
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Xiamen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Xiamen Goldenhome Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiamen Goldenhome 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 Xiamen Goldenhome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiamen Goldenhome has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Xiamen Goldenhome go up and down completely randomly.
Pair Corralation between Tianjin Hi and Xiamen Goldenhome
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to under-perform the Xiamen Goldenhome. In addition to that, Tianjin Hi is 1.71 times more volatile than Xiamen Goldenhome Co. It trades about -0.01 of its total potential returns per unit of risk. Xiamen Goldenhome Co is currently generating about 0.07 per unit of volatility. If you would invest 1,969 in Xiamen Goldenhome Co on August 28, 2024 and sell it today you would earn a total of 51.00 from holding Xiamen Goldenhome Co or generate 2.59% 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. Xiamen Goldenhome Co
Performance |
| Timeline |
| Tianjin Hi Tech |
| Xiamen Goldenhome |
Tianjin Hi and Xiamen Goldenhome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Xiamen Goldenhome
The main advantage of trading using opposite Tianjin Hi and Xiamen Goldenhome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Xiamen Goldenhome 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 Xiamen Goldenhome will offset losses from the drop in Xiamen Goldenhome's long position.| Tianjin Hi vs. Zhengzhou Qianweiyangchu Food | Tianjin Hi vs. Great Sun Foods Co | Tianjin Hi vs. Digital China Information | Tianjin Hi vs. Namchow Food Group |
| Xiamen Goldenhome vs. China Petroleum Chemical | Xiamen Goldenhome vs. PetroChina Co Ltd | Xiamen Goldenhome vs. China State Construction | Xiamen Goldenhome vs. China Railway 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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