Correlation Between Liaoning Dingjide and Tjk Machinery
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Tjk Machinery Tianjin, you can compare the effects of market volatilities on Liaoning Dingjide and Tjk Machinery 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 Liaoning Dingjide with a short position of Tjk Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Tjk Machinery.
Diversification Opportunities for Liaoning Dingjide and Tjk Machinery
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Liaoning and Tjk is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica and Tjk Machinery Tianjin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tjk Machinery Tianjin and Liaoning Dingjide 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 Liaoning Dingjide Petrochemical are associated (or correlated) with Tjk Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tjk Machinery Tianjin has no effect on the direction of Liaoning Dingjide i.e., Liaoning Dingjide and Tjk Machinery go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Tjk Machinery
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to generate 0.95 times more return on investment than Tjk Machinery. However, Liaoning Dingjide Petrochemical is 1.05 times less risky than Tjk Machinery. It trades about -0.01 of its potential returns per unit of risk. Tjk Machinery Tianjin is currently generating about -0.01 per unit of risk. If you would invest 3,140 in Liaoning Dingjide Petrochemical on November 1, 2024 and sell it today you would lose (195.00) from holding Liaoning Dingjide Petrochemical or give up 6.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Tjk Machinery Tianjin
Performance |
| Timeline |
| Liaoning Dingjide |
| Tjk Machinery Tianjin |
Liaoning Dingjide and Tjk Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Dingjide and Tjk Machinery
The main advantage of trading using opposite Liaoning Dingjide and Tjk Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide position performs unexpectedly, Tjk Machinery 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 Tjk Machinery will offset losses from the drop in Tjk Machinery's long position.| Liaoning Dingjide vs. Zhejiang Construction Investment | Liaoning Dingjide vs. Postal Savings Bank | Liaoning Dingjide vs. Tsingtao Brewery Co | Liaoning Dingjide vs. Rising Nonferrous Metals |
| Tjk Machinery vs. Beijing Enlight Media | Tjk Machinery vs. Shuhua Sports Co | Tjk Machinery vs. Southern PublishingMedia Co | Tjk Machinery vs. Everdisplay Optronics Shanghai |
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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