Correlation Between Changshu Tongrun and Tianshui Huatian
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By analyzing existing cross correlation between Changshu Tongrun Auto and Tianshui Huatian Technology, you can compare the effects of market volatilities on Changshu Tongrun and Tianshui Huatian 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 Changshu Tongrun with a short position of Tianshui Huatian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Tianshui Huatian.
Diversification Opportunities for Changshu Tongrun and Tianshui Huatian
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changshu and Tianshui is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Tianshui Huatian Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianshui Huatian Tec and Changshu Tongrun 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 Changshu Tongrun Auto are associated (or correlated) with Tianshui Huatian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianshui Huatian Tec has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Tianshui Huatian go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Tianshui Huatian
Assuming the 90 days trading horizon Changshu Tongrun Auto is expected to generate 1.3 times more return on investment than Tianshui Huatian. However, Changshu Tongrun is 1.3 times more volatile than Tianshui Huatian Technology. It trades about -0.07 of its potential returns per unit of risk. Tianshui Huatian Technology is currently generating about -0.12 per unit of risk. If you would invest 1,823 in Changshu Tongrun Auto on January 28, 2025 and sell it today you would lose (122.00) from holding Changshu Tongrun Auto or give up 6.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Tianshui Huatian Technology
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Tianshui Huatian Tec |
Changshu Tongrun and Tianshui Huatian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Tianshui Huatian
The main advantage of trading using opposite Changshu Tongrun and Tianshui Huatian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Tianshui Huatian 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 Tianshui Huatian will offset losses from the drop in Tianshui Huatian's long position.| Changshu Tongrun vs. Jiangsu Jinling Sports | Changshu Tongrun vs. Sportsoul Co Ltd | Changshu Tongrun vs. Shanghai Construction Group | Changshu Tongrun vs. Yunnan Shennong Agricultural |
| Tianshui Huatian vs. Shuhua Sports Co | Tianshui Huatian vs. Jiangsu Jinling Sports | Tianshui Huatian vs. Hubei Huaqiang High Tech | Tianshui Huatian vs. CGN Nuclear Technology |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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