Correlation Between Tianjin Realty and Shandong Xinhua
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By analyzing existing cross correlation between Tianjin Realty Development and Shandong Xinhua Pharmaceutical, you can compare the effects of market volatilities on Tianjin Realty and Shandong Xinhua 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 Realty with a short position of Shandong Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Realty and Shandong Xinhua.
Diversification Opportunities for Tianjin Realty and Shandong Xinhua
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and Shandong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development and Shandong Xinhua Pharmaceutical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Xinhua Phar and Tianjin Realty 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 Realty Development are associated (or correlated) with Shandong Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Xinhua Phar has no effect on the direction of Tianjin Realty i.e., Tianjin Realty and Shandong Xinhua go up and down completely randomly.
Pair Corralation between Tianjin Realty and Shandong Xinhua
Assuming the 90 days trading horizon Tianjin Realty Development is expected to generate 1.44 times more return on investment than Shandong Xinhua. However, Tianjin Realty is 1.44 times more volatile than Shandong Xinhua Pharmaceutical. It trades about 0.02 of its potential returns per unit of risk. Shandong Xinhua Pharmaceutical is currently generating about -0.03 per unit of risk. If you would invest 226.00 in Tianjin Realty Development on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Tianjin Realty Development or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Realty Development vs. Shandong Xinhua Pharmaceutical
Performance |
| Timeline |
| Tianjin Realty Devel |
| Shandong Xinhua Phar |
Tianjin Realty and Shandong Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Realty and Shandong Xinhua
The main advantage of trading using opposite Tianjin Realty and Shandong Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Realty position performs unexpectedly, Shandong Xinhua 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 Shandong Xinhua will offset losses from the drop in Shandong Xinhua's long position.| Tianjin Realty vs. Industrial and Commercial | Tianjin Realty vs. China Construction Bank | Tianjin Realty vs. Bank of China | Tianjin Realty vs. Agricultural Bank of |
| Shandong Xinhua vs. Anhui Deli Household | Shandong Xinhua vs. Yangmei Chemical Co | Shandong Xinhua vs. Chahua Modern Housewares | Shandong Xinhua vs. Liuzhou Chemical Industry |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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