Correlation Between Tianjin Hi and Suzhou Mingzhi
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Suzhou Mingzhi Technology, you can compare the effects of market volatilities on Tianjin Hi and Suzhou Mingzhi 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 Mingzhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Suzhou Mingzhi.
Diversification Opportunities for Tianjin Hi and Suzhou Mingzhi
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Suzhou is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Suzhou Mingzhi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suzhou Mingzhi Technology 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 Mingzhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suzhou Mingzhi Technology has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Suzhou Mingzhi go up and down completely randomly.
Pair Corralation between Tianjin Hi and Suzhou Mingzhi
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to under-perform the Suzhou Mingzhi. But the stock apears to be less risky and, when comparing its historical volatility, Tianjin Hi Tech Development is 1.24 times less risky than Suzhou Mingzhi. The stock trades about -0.01 of its potential returns per unit of risk. The Suzhou Mingzhi Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,795 in Suzhou Mingzhi Technology on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Suzhou Mingzhi Technology or generate 3.06% 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. Suzhou Mingzhi Technology
Performance |
| Timeline |
| Tianjin Hi Tech |
| Suzhou Mingzhi Technology |
Tianjin Hi and Suzhou Mingzhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Suzhou Mingzhi
The main advantage of trading using opposite Tianjin Hi and Suzhou Mingzhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Suzhou Mingzhi 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 Mingzhi will offset losses from the drop in Suzhou Mingzhi'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 Mingzhi vs. Epoxy Base Electronic | Suzhou Mingzhi vs. Nantong Haixing Electronics | Suzhou Mingzhi vs. China Life Insurance | Suzhou Mingzhi vs. Hangzhou Weiguang Electronic |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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