Correlation Between Sanan Optoelectronics and Tianjin Realty
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By analyzing existing cross correlation between Sanan Optoelectronics Co and Tianjin Realty Development, you can compare the effects of market volatilities on Sanan Optoelectronics and Tianjin Realty 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 Sanan Optoelectronics with a short position of Tianjin Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sanan Optoelectronics and Tianjin Realty.
Diversification Opportunities for Sanan Optoelectronics and Tianjin Realty
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sanan and Tianjin is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sanan Optoelectronics Co and Tianjin Realty Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Realty Devel and Sanan Optoelectronics 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 Sanan Optoelectronics Co are associated (or correlated) with Tianjin Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Realty Devel has no effect on the direction of Sanan Optoelectronics i.e., Sanan Optoelectronics and Tianjin Realty go up and down completely randomly.
Pair Corralation between Sanan Optoelectronics and Tianjin Realty
Assuming the 90 days trading horizon Sanan Optoelectronics Co is expected to under-perform the Tianjin Realty. But the stock apears to be less risky and, when comparing its historical volatility, Sanan Optoelectronics Co is 1.76 times less risky than Tianjin Realty. The stock trades about -0.01 of its potential returns per unit of risk. The Tianjin Realty Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 252.00 in Tianjin Realty Development on September 14, 2024 and sell it today you would earn a total of 43.00 from holding Tianjin Realty Development or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.62% |
| Values | Daily Returns |
Sanan Optoelectronics Co vs. Tianjin Realty Development
Performance |
| Timeline |
| Sanan Optoelectronics |
| Tianjin Realty Devel |
Sanan Optoelectronics and Tianjin Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sanan Optoelectronics and Tianjin Realty
The main advantage of trading using opposite Sanan Optoelectronics and Tianjin Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sanan Optoelectronics position performs unexpectedly, Tianjin Realty 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 Realty will offset losses from the drop in Tianjin Realty's long position.The idea behind Sanan Optoelectronics Co and Tianjin Realty Development 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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