Correlation Between Tianjin Hi and Namchow Food
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Namchow Food Group, you can compare the effects of market volatilities on Tianjin Hi and Namchow Food 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 Namchow Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Namchow Food.
Diversification Opportunities for Tianjin Hi and Namchow Food
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Namchow is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Namchow Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Namchow Food Group 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 Namchow Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Namchow Food Group has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Namchow Food go up and down completely randomly.
Pair Corralation between Tianjin Hi and Namchow Food
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to generate 1.62 times more return on investment than Namchow Food. However, Tianjin Hi is 1.62 times more volatile than Namchow Food Group. It trades about -0.01 of its potential returns per unit of risk. Namchow Food Group is currently generating about -0.08 per unit of risk. If you would invest 306.00 in Tianjin Hi Tech Development on August 28, 2024 and sell it today you would lose (5.00) from holding Tianjin Hi Tech Development or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. Namchow Food Group
Performance |
| Timeline |
| Tianjin Hi Tech |
| Namchow Food Group |
Tianjin Hi and Namchow Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Namchow Food
The main advantage of trading using opposite Tianjin Hi and Namchow Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Namchow Food 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 Namchow Food will offset losses from the drop in Namchow Food'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 |
| Namchow Food vs. China Petroleum Chemical | Namchow Food vs. PetroChina Co Ltd | Namchow Food vs. China State Construction | Namchow Food 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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