Correlation Between Northern United and Tianjin Hi
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By analyzing existing cross correlation between Northern United Publishing and Tianjin Hi Tech Development, you can compare the effects of market volatilities on Northern United and Tianjin Hi 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 Northern United with a short position of Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern United and Tianjin Hi.
Diversification Opportunities for Northern United and Tianjin Hi
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Northern and Tianjin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Northern United Publishing and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech and Northern United 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 Northern United Publishing are associated (or correlated) with Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of Northern United i.e., Northern United and Tianjin Hi go up and down completely randomly.
Pair Corralation between Northern United and Tianjin Hi
Assuming the 90 days trading horizon Northern United is expected to generate 1.23 times less return on investment than Tianjin Hi. But when comparing it to its historical volatility, Northern United Publishing is 1.05 times less risky than Tianjin Hi. It trades about 0.3 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Tianjin Hi Tech Development on November 7, 2024 and sell it today you would earn a total of 31.00 from holding Tianjin Hi Tech Development or generate 12.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern United Publishing vs. Tianjin Hi Tech Development
Performance |
| Timeline |
| Northern United Publ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianjin Hi Tech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Northern United and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern United and Tianjin Hi
The main advantage of trading using opposite Northern United and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern United position performs unexpectedly, Tianjin Hi 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 Hi will offset losses from the drop in Tianjin Hi's long position.The idea behind Northern United Publishing and Tianjin Hi Tech 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.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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