Correlation Between Tianjin Realty and CICT Mobile
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By analyzing existing cross correlation between Tianjin Realty Development and CICT Mobile Communication, you can compare the effects of market volatilities on Tianjin Realty and CICT Mobile 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 CICT Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Realty and CICT Mobile.
Diversification Opportunities for Tianjin Realty and CICT Mobile
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and CICT is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development and CICT Mobile Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CICT Mobile Communication 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 CICT Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CICT Mobile Communication has no effect on the direction of Tianjin Realty i.e., Tianjin Realty and CICT Mobile go up and down completely randomly.
Pair Corralation between Tianjin Realty and CICT Mobile
Assuming the 90 days trading horizon Tianjin Realty Development is expected to generate 1.75 times more return on investment than CICT Mobile. However, Tianjin Realty is 1.75 times more volatile than CICT Mobile Communication. It trades about 0.16 of its potential returns per unit of risk. CICT Mobile Communication is currently generating about -0.03 per unit of risk. If you would invest 197.00 in Tianjin Realty Development on August 30, 2024 and sell it today you would earn a total of 34.00 from holding Tianjin Realty Development or generate 17.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tianjin Realty Development vs. CICT Mobile Communication
Performance |
| Timeline |
| Tianjin Realty Devel |
| CICT Mobile Communication |
Tianjin Realty and CICT Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Realty and CICT Mobile
The main advantage of trading using opposite Tianjin Realty and CICT Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Realty position performs unexpectedly, CICT Mobile 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 CICT Mobile will offset losses from the drop in CICT Mobile's long position.The idea behind Tianjin Realty Development and CICT Mobile Communication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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