Correlation Between Haima Automobile and Tianjin Pengling
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By analyzing existing cross correlation between Haima Automobile Group and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Haima Automobile and Tianjin Pengling 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 Haima Automobile with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haima Automobile and Tianjin Pengling.
Diversification Opportunities for Haima Automobile and Tianjin Pengling
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haima and Tianjin is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Haima Automobile Group and Tianjin Pengling Rubber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Pengling Rubber and Haima Automobile 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 Haima Automobile Group are associated (or correlated) with Tianjin Pengling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Pengling Rubber has no effect on the direction of Haima Automobile i.e., Haima Automobile and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Haima Automobile and Tianjin Pengling
Assuming the 90 days trading horizon Haima Automobile Group is expected to under-perform the Tianjin Pengling. In addition to that, Haima Automobile is 1.82 times more volatile than Tianjin Pengling Rubber. It trades about -0.12 of its total potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.08 per unit of volatility. If you would invest 504.00 in Tianjin Pengling Rubber on September 6, 2024 and sell it today you would earn a total of 20.00 from holding Tianjin Pengling Rubber or generate 3.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Haima Automobile Group vs. Tianjin Pengling Rubber
Performance |
Timeline |
Haima Automobile |
Tianjin Pengling Rubber |
Haima Automobile and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Haima Automobile and Tianjin Pengling
The main advantage of trading using opposite Haima Automobile and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haima Automobile position performs unexpectedly, Tianjin Pengling 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 Tianjin Pengling will offset losses from the drop in Tianjin Pengling's long position.Haima Automobile vs. Industrial and Commercial | Haima Automobile vs. China Construction Bank | Haima Automobile vs. Agricultural Bank of | Haima Automobile vs. Bank of China |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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