Correlation Between Xinjiang Tianrun and Tianjin Silvery
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By analyzing existing cross correlation between Xinjiang Tianrun Dairy and Tianjin Silvery Dragon, you can compare the effects of market volatilities on Xinjiang Tianrun and Tianjin Silvery 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 Xinjiang Tianrun with a short position of Tianjin Silvery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xinjiang Tianrun and Tianjin Silvery.
Diversification Opportunities for Xinjiang Tianrun and Tianjin Silvery
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Xinjiang and Tianjin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Xinjiang Tianrun Dairy and Tianjin Silvery Dragon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Silvery Dragon and Xinjiang Tianrun 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 Xinjiang Tianrun Dairy are associated (or correlated) with Tianjin Silvery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Silvery Dragon has no effect on the direction of Xinjiang Tianrun i.e., Xinjiang Tianrun and Tianjin Silvery go up and down completely randomly.
Pair Corralation between Xinjiang Tianrun and Tianjin Silvery
Assuming the 90 days trading horizon Xinjiang Tianrun Dairy is expected to under-perform the Tianjin Silvery. But the stock apears to be less risky and, when comparing its historical volatility, Xinjiang Tianrun Dairy is 1.28 times less risky than Tianjin Silvery. The stock trades about -0.04 of its potential returns per unit of risk. The Tianjin Silvery Dragon is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 642.00 in Tianjin Silvery Dragon on November 7, 2024 and sell it today you would lose (11.00) from holding Tianjin Silvery Dragon or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xinjiang Tianrun Dairy vs. Tianjin Silvery Dragon
Performance |
| Timeline |
| Xinjiang Tianrun Dairy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianjin Silvery Dragon |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Xinjiang Tianrun and Tianjin Silvery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xinjiang Tianrun and Tianjin Silvery
The main advantage of trading using opposite Xinjiang Tianrun and Tianjin Silvery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xinjiang Tianrun position performs unexpectedly, Tianjin Silvery 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 Tianjin Silvery will offset losses from the drop in Tianjin Silvery's long position.The idea behind Xinjiang Tianrun Dairy and Tianjin Silvery Dragon 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.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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