Correlation Between Tianjin Silvery and Fujian Longzhou
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By analyzing existing cross correlation between Tianjin Silvery Dragon and Fujian Longzhou Transportation, you can compare the effects of market volatilities on Tianjin Silvery and Fujian Longzhou 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 Tianjin Silvery with a short position of Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Silvery and Fujian Longzhou.
Diversification Opportunities for Tianjin Silvery and Fujian Longzhou
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and Fujian is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Silvery Dragon and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran and Tianjin Silvery 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 Tianjin Silvery Dragon are associated (or correlated) with Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of Tianjin Silvery i.e., Tianjin Silvery and Fujian Longzhou go up and down completely randomly.
Pair Corralation between Tianjin Silvery and Fujian Longzhou
Assuming the 90 days trading horizon Tianjin Silvery is expected to generate 1.43 times less return on investment than Fujian Longzhou. But when comparing it to its historical volatility, Tianjin Silvery Dragon is 1.75 times less risky than Fujian Longzhou. It trades about 0.08 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 529.00 in Fujian Longzhou Transportation on September 12, 2024 and sell it today you would earn a total of 23.00 from holding Fujian Longzhou Transportation or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Silvery Dragon vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| Tianjin Silvery Dragon |
| Fujian Longzhou Tran |
Tianjin Silvery and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Silvery and Fujian Longzhou
The main advantage of trading using opposite Tianjin Silvery and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Silvery position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| Tianjin Silvery vs. Zijin Mining Group | Tianjin Silvery vs. Wanhua Chemical Group | Tianjin Silvery vs. Baoshan Iron Steel | Tianjin Silvery vs. Rongsheng Petrochemical Co |
| Fujian Longzhou vs. Agricultural Bank of | Fujian Longzhou vs. Industrial and Commercial | Fujian Longzhou vs. Bank of China | Fujian Longzhou vs. PetroChina Co Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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