Correlation Between Tianjin Realty and Metro Investment
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By analyzing existing cross correlation between Tianjin Realty Development and Metro Investment Development, you can compare the effects of market volatilities on Tianjin Realty and Metro Investment 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 Metro Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Realty and Metro Investment.
Diversification Opportunities for Tianjin Realty and Metro Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and Metro is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development and Metro Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro Investment Dev 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 Metro Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro Investment Dev has no effect on the direction of Tianjin Realty i.e., Tianjin Realty and Metro Investment go up and down completely randomly.
Pair Corralation between Tianjin Realty and Metro Investment
Assuming the 90 days trading horizon Tianjin Realty Development is expected to generate 1.08 times more return on investment than Metro Investment. However, Tianjin Realty is 1.08 times more volatile than Metro Investment Development. It trades about 0.02 of its potential returns per unit of risk. Metro Investment Development is currently generating about 0.01 per unit of risk. If you would invest 243.00 in Tianjin Realty Development on September 5, 2024 and sell it today you would earn a total of 12.00 from holding Tianjin Realty Development or generate 4.94% 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. Metro Investment Development
Performance |
| Timeline |
| Tianjin Realty Devel |
| Metro Investment Dev |
Tianjin Realty and Metro Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Realty and Metro Investment
The main advantage of trading using opposite Tianjin Realty and Metro Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Realty position performs unexpectedly, Metro Investment 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 Metro Investment will offset losses from the drop in Metro Investment's long position.| Tianjin Realty vs. Nanjing Putian Telecommunications | Tianjin Realty vs. Shenyang Huitian Thermal | Tianjin Realty vs. Shenzhen Changfang Light | Tianjin Realty vs. Jiangsu Xinning Modern |
| Metro Investment vs. Nanjing Putian Telecommunications | Metro Investment vs. Tianjin Realty Development | Metro Investment vs. Shenyang Huitian Thermal | Metro Investment vs. Shenzhen Changfang Light |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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