Correlation Between Tibet Huayu and Dalian Thermal
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By analyzing existing cross correlation between Tibet Huayu Mining and Dalian Thermal Power, you can compare the effects of market volatilities on Tibet Huayu and Dalian Thermal 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 Tibet Huayu with a short position of Dalian Thermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tibet Huayu and Dalian Thermal.
Diversification Opportunities for Tibet Huayu and Dalian Thermal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tibet and Dalian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tibet Huayu Mining and Dalian Thermal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Thermal Power and Tibet Huayu 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 Tibet Huayu Mining are associated (or correlated) with Dalian Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Thermal Power has no effect on the direction of Tibet Huayu i.e., Tibet Huayu and Dalian Thermal go up and down completely randomly.
Pair Corralation between Tibet Huayu and Dalian Thermal
Assuming the 90 days trading horizon Tibet Huayu Mining is expected to generate 0.51 times more return on investment than Dalian Thermal. However, Tibet Huayu Mining is 1.96 times less risky than Dalian Thermal. It trades about -0.47 of its potential returns per unit of risk. Dalian Thermal Power is currently generating about -0.31 per unit of risk. If you would invest 1,467 in Tibet Huayu Mining on October 7, 2024 and sell it today you would lose (254.00) from holding Tibet Huayu Mining or give up 17.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tibet Huayu Mining vs. Dalian Thermal Power
Performance |
| Timeline |
| Tibet Huayu Mining |
| Dalian Thermal Power |
Tibet Huayu and Dalian Thermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tibet Huayu and Dalian Thermal
The main advantage of trading using opposite Tibet Huayu and Dalian Thermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tibet Huayu position performs unexpectedly, Dalian Thermal 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 Dalian Thermal will offset losses from the drop in Dalian Thermal's long position.| Tibet Huayu vs. Zijin Mining Group | Tibet Huayu vs. Wanhua Chemical Group | Tibet Huayu vs. Baoshan Iron Steel | Tibet Huayu vs. Hoshine Silicon Ind |
| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Construction Bank | Dalian Thermal vs. Bank of China |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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