Correlation Between Tingyi Holding and BH Global

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Can any of the company-specific risk be diversified away by investing in both Tingyi Holding and BH Global 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 BH Global 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 BH Global, you can compare the effects of market volatilities on Tingyi Holding and BH Global 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 BH Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tingyi Holding and BH Global.

Diversification Opportunities for Tingyi Holding and BH Global

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Tingyi and 911608 is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tingyi Holding Corp and BH Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BH Global 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 BH Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BH Global has no effect on the direction of Tingyi Holding i.e., Tingyi Holding and BH Global go up and down completely randomly.

Pair Corralation between Tingyi Holding and BH Global

Assuming the 90 days trading horizon Tingyi Holding Corp is expected to under-perform the BH Global. But the stock apears to be less risky and, when comparing its historical volatility, Tingyi Holding Corp is 2.59 times less risky than BH Global. The stock trades about -0.08 of its potential returns per unit of risk. The BH Global is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  317.00  in BH Global on September 14, 2024 and sell it today you would earn a total of  85.00  from holding BH Global or generate 26.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

Tingyi Holding Corp  vs.  BH Global

 Performance 
       Timeline  
Tingyi Holding Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Tingyi Holding Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tingyi Holding is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
BH Global 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in BH Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BH Global sustained solid returns over the last few months and may actually be approaching a breakup point.

Tingyi Holding and BH Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tingyi Holding and BH Global

The main advantage of trading using opposite Tingyi Holding and BH Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tingyi Holding position performs unexpectedly, BH Global 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 BH Global will offset losses from the drop in BH Global's long position.
The idea behind Tingyi Holding Corp and BH Global 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.
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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