Correlation Between Tianjin Capital and Hang Xiao
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By analyzing existing cross correlation between Tianjin Capital Environmental and Hang Xiao Steel, you can compare the effects of market volatilities on Tianjin Capital and Hang Xiao 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 Hang Xiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Hang Xiao.
Diversification Opportunities for Tianjin Capital and Hang Xiao
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and Hang is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel 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 Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Hang Xiao go up and down completely randomly.
Pair Corralation between Tianjin Capital and Hang Xiao
Assuming the 90 days trading horizon Tianjin Capital Environmental is expected to generate 0.73 times more return on investment than Hang Xiao. However, Tianjin Capital Environmental is 1.37 times less risky than Hang Xiao. It trades about 0.03 of its potential returns per unit of risk. Hang Xiao Steel is currently generating about -0.07 per unit of risk. If you would invest 606.00 in Tianjin Capital Environmental on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Tianjin Capital Environmental or generate 0.83% 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. Hang Xiao Steel
Performance |
| Timeline |
| Tianjin Capital Envi |
| Hang Xiao Steel |
Tianjin Capital and Hang Xiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Hang Xiao
The main advantage of trading using opposite Tianjin Capital and Hang Xiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Hang Xiao 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 Hang Xiao will offset losses from the drop in Hang Xiao's long position.| Tianjin Capital vs. Bank of China | Tianjin Capital vs. Kweichow Moutai Co | Tianjin Capital vs. PetroChina Co Ltd | Tianjin Capital vs. Bank of Communications |
| Hang Xiao vs. Western Metal Materials | Hang Xiao vs. Heilongjiang Transport Development | Hang Xiao vs. Dezhan HealthCare Co | Hang Xiao vs. Shanghai Rongtai Health |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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