Correlation Between Tianfeng Securities and Haima Automobile
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By analyzing existing cross correlation between Tianfeng Securities Co and Haima Automobile Group, you can compare the effects of market volatilities on Tianfeng Securities and Haima Automobile 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 Tianfeng Securities with a short position of Haima Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianfeng Securities and Haima Automobile.
Diversification Opportunities for Tianfeng Securities and Haima Automobile
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianfeng and Haima is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tianfeng Securities Co and Haima Automobile Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haima Automobile and Tianfeng Securities 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 Tianfeng Securities Co are associated (or correlated) with Haima Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haima Automobile has no effect on the direction of Tianfeng Securities i.e., Tianfeng Securities and Haima Automobile go up and down completely randomly.
Pair Corralation between Tianfeng Securities and Haima Automobile
Assuming the 90 days trading horizon Tianfeng Securities Co is expected to under-perform the Haima Automobile. In addition to that, Tianfeng Securities is 1.34 times more volatile than Haima Automobile Group. It trades about -0.02 of its total potential returns per unit of risk. Haima Automobile Group is currently generating about -0.02 per unit of volatility. If you would invest 430.00 in Haima Automobile Group on November 30, 2024 and sell it today you would lose (12.00) from holding Haima Automobile Group or give up 2.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianfeng Securities Co vs. Haima Automobile Group
Performance |
| Timeline |
| Tianfeng Securities |
| Haima Automobile |
Tianfeng Securities and Haima Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianfeng Securities and Haima Automobile
The main advantage of trading using opposite Tianfeng Securities and Haima Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianfeng Securities position performs unexpectedly, Haima Automobile 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 Haima Automobile will offset losses from the drop in Haima Automobile's long position.The idea behind Tianfeng Securities Co and Haima Automobile Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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