Correlation Between Tianjin Hi and Shanghai Baosight
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By analyzing existing cross correlation between Tianjin Hi Tech Development and Shanghai Baosight Software, you can compare the effects of market volatilities on Tianjin Hi and Shanghai Baosight 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 Shanghai Baosight. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Hi and Shanghai Baosight.
Diversification Opportunities for Tianjin Hi and Shanghai Baosight
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Shanghai is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Hi Tech Development and Shanghai Baosight Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Baosight 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 Shanghai Baosight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Baosight has no effect on the direction of Tianjin Hi i.e., Tianjin Hi and Shanghai Baosight go up and down completely randomly.
Pair Corralation between Tianjin Hi and Shanghai Baosight
Assuming the 90 days trading horizon Tianjin Hi Tech Development is expected to generate 1.32 times more return on investment than Shanghai Baosight. However, Tianjin Hi is 1.32 times more volatile than Shanghai Baosight Software. It trades about 0.12 of its potential returns per unit of risk. Shanghai Baosight Software is currently generating about 0.1 per unit of risk. If you would invest 287.00 in Tianjin Hi Tech Development on August 30, 2024 and sell it today you would earn a total of 22.00 from holding Tianjin Hi Tech Development or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Hi Tech Development vs. Shanghai Baosight Software
Performance |
| Timeline |
| Tianjin Hi Tech |
| Shanghai Baosight |
Tianjin Hi and Shanghai Baosight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Hi and Shanghai Baosight
The main advantage of trading using opposite Tianjin Hi and Shanghai Baosight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Hi position performs unexpectedly, Shanghai Baosight 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 Shanghai Baosight will offset losses from the drop in Shanghai Baosight's long position.| Tianjin Hi vs. Cultural Investment Holdings | Tianjin Hi vs. Gome Telecom Equipment | Tianjin Hi vs. Bus Online Co | Tianjin Hi vs. Holitech Technology Co |
| Shanghai Baosight vs. Anji Foodstuff Co | Shanghai Baosight vs. Guocheng Mining Co | Shanghai Baosight vs. Western Mining Co | Shanghai Baosight vs. HaiXin Foods Co |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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