Correlation Between Tianjin Realty and Wuxi Chemical
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By analyzing existing cross correlation between Tianjin Realty Development and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Tianjin Realty and Wuxi Chemical 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 Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Realty and Wuxi Chemical.
Diversification Opportunities for Tianjin Realty and Wuxi Chemical
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Wuxi is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment 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 Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Tianjin Realty i.e., Tianjin Realty and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Tianjin Realty and Wuxi Chemical
Assuming the 90 days trading horizon Tianjin Realty is expected to generate 1.46 times less return on investment than Wuxi Chemical. In addition to that, Tianjin Realty is 1.28 times more volatile than Wuxi Chemical Equipment. It trades about 0.02 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about 0.03 per unit of volatility. If you would invest 3,198 in Wuxi Chemical Equipment on September 2, 2024 and sell it today you would earn a total of 443.00 from holding Wuxi Chemical Equipment or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Realty Development vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Tianjin Realty Devel |
| Wuxi Chemical Equipment |
Tianjin Realty and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Realty and Wuxi Chemical
The main advantage of trading using opposite Tianjin Realty and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Realty position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Tianjin Realty vs. BeiGene | Tianjin Realty vs. Kweichow Moutai Co | Tianjin Realty vs. Beijing Roborock Technology | Tianjin Realty vs. G bits Network Technology |
| Wuxi Chemical vs. New China Life | Wuxi Chemical vs. Ming Yang Smart | Wuxi Chemical vs. 159681 | Wuxi Chemical vs. 159005 |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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