Correlation Between Tingyi Holding and Hsinli Chemical
Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and Hsinli Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tingyi Holding and Hsinli Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tingyi Holding Corp and Hsinli Chemical Industrial, you can compare the effects of market volatilities on Tingyi Holding and Hsinli Chemical 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 Tingyi Holding with a short position of Hsinli Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and Hsinli Chemical.
Diversification Opportunities for Tingyi Holding and Hsinli Chemical
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tingyi and Hsinli is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and Hsinli Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hsinli Chemical Indu and Tingyi Holding 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 Tingyi Holding Corp are associated (or correlated) with Hsinli Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hsinli Chemical Indu has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and Hsinli Chemical go up and down completely randomly.
Pair Corralation between Tingyi Holding and Hsinli Chemical
Assuming the 90 days trading horizon Tingyi Holding Corp is expected to generate 2.39 times more return on investment than Hsinli Chemical. However, Tingyi Holding is 2.39 times more volatile than Hsinli Chemical Industrial. It trades about 0.34 of its potential returns per unit of risk. Hsinli Chemical Industrial is currently generating about -0.4 per unit of risk. If you would invest 2,080 in Tingyi Holding Corp on November 3, 2024 and sell it today you would earn a total of 330.00 from holding Tingyi Holding Corp or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tingyi Holding Corp vs. Hsinli Chemical Industrial
Performance |
| Timeline |
| Tingyi Holding Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Hsinli Chemical Indu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Tingyi Holding and Hsinli Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tingyi Holding and Hsinli Chemical
The main advantage of trading using opposite Tingyi Holding and Hsinli Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, Hsinli Chemical 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 Hsinli Chemical will offset losses from the drop in Hsinli Chemical's long position.The idea behind Tingyi Holding Corp and Hsinli Chemical Industrial 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |