Correlation Between Tianjin Capital and Shenzhen
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By analyzing existing cross correlation between Tianjin Capital Environmental and Shenzhen AV Display Co, you can compare the effects of market volatilities on Tianjin Capital and Shenzhen 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 Capital with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Shenzhen.
Diversification Opportunities for Tianjin Capital and Shenzhen
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Shenzhen is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display and Tianjin Capital 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 Capital Environmental are associated (or correlated) with Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Shenzhen go up and down completely randomly.
Pair Corralation between Tianjin Capital and Shenzhen
Assuming the 90 days trading horizon Tianjin Capital is expected to generate 4.19 times less return on investment than Shenzhen. But when comparing it to its historical volatility, Tianjin Capital Environmental is 1.91 times less risky than Shenzhen. It trades about 0.03 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,621 in Shenzhen AV Display Co on September 5, 2024 and sell it today you would earn a total of 798.00 from holding Shenzhen AV Display Co or generate 30.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Shenzhen AV Display Co
Performance |
| Timeline |
| Tianjin Capital Envi |
| Shenzhen AV Display |
Tianjin Capital and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Shenzhen
The main advantage of trading using opposite Tianjin Capital and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Shenzhen 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 Shenzhen will offset losses from the drop in Shenzhen's long position.| Tianjin Capital vs. Huasi Agricultural Development | Tianjin Capital vs. Allied Machinery Co | Tianjin Capital vs. Weichai Heavy Machinery | Tianjin Capital vs. Tongyu Communication |
| Shenzhen vs. Elite Color Environmental | Shenzhen vs. Tianjin Capital Environmental | Shenzhen vs. Wuhan Yangtze Communication | Shenzhen vs. Anhui Fuhuang Steel |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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