Correlation Between Tianjin Hi and Suzhou Weizhixiang
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Suzhou Weizhixiang Food, you can compare the effects of market volatilities on Tianjin Hi and Suzhou Weizhixiang 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 Suzhou Weizhixiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Suzhou Weizhixiang.
Diversification Opportunities for Tianjin Hi and Suzhou Weizhixiang
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Suzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Suzhou Weizhixiang Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Weizhixiang Food 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 Suzhou Weizhixiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Weizhixiang Food has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Suzhou Weizhixiang go up and down completely randomly.
Pair Corralation between Tianjin Hi and Suzhou Weizhixiang
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to generate 1.23 times more return on investment than Suzhou Weizhixiang. However, Tianjin Hi is 1.23 times more volatile than Suzhou Weizhixiang Food. It trades about 0.01 of its potential returns per unit of risk. Suzhou Weizhixiang Food is currently generating about -0.02 per unit of risk. If you would invest 310.00 in Tianjin Hi Tech Development on August 28, 2024 and sell it today you would lose (9.00) from holding Tianjin Hi Tech Development or give up 2.9% of portfolio value 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. Suzhou Weizhixiang Food
Performance |
| Timeline |
| Tianjin Hi Tech |
| Suzhou Weizhixiang Food |
Tianjin Hi and Suzhou Weizhixiang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Suzhou Weizhixiang
The main advantage of trading using opposite Tianjin Hi and Suzhou Weizhixiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Suzhou Weizhixiang 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 Suzhou Weizhixiang will offset losses from the drop in Suzhou Weizhixiang's long position.| Tianjin Hi vs. Nanjing Putian Telecommunications | Tianjin Hi vs. Shenzhen Hifuture Electric | Tianjin Hi vs. Shenyang Huitian Thermal | Tianjin Hi vs. Jiangsu Xinning Modern |
| Suzhou Weizhixiang vs. China Petroleum Chemical | Suzhou Weizhixiang vs. PetroChina Co Ltd | Suzhou Weizhixiang vs. China State Construction | Suzhou Weizhixiang 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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