Correlation Between Shenyang Huitian and Tianjin Pengling
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By analyzing existing cross correlation between Shenyang Huitian Thermal and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Shenyang Huitian 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 Shenyang Huitian with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenyang Huitian and Tianjin Pengling.
Diversification Opportunities for Shenyang Huitian and Tianjin Pengling
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenyang and Tianjin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Shenyang Huitian Thermal 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 Shenyang Huitian 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 Shenyang Huitian Thermal 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 Shenyang Huitian i.e., Shenyang Huitian and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Shenyang Huitian and Tianjin Pengling
Assuming the 90 days trading horizon Shenyang Huitian Thermal is expected to generate 0.93 times more return on investment than Tianjin Pengling. However, Shenyang Huitian Thermal is 1.08 times less risky than Tianjin Pengling. It trades about 0.17 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.15 per unit of risk. If you would invest 281.00 in Shenyang Huitian Thermal on September 8, 2024 and sell it today you would earn a total of 106.00 from holding Shenyang Huitian Thermal or generate 37.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenyang Huitian Thermal vs. Tianjin Pengling Rubber
Performance |
Timeline |
Shenyang Huitian Thermal |
Tianjin Pengling Rubber |
Shenyang Huitian and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenyang Huitian and Tianjin Pengling
The main advantage of trading using opposite Shenyang Huitian and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenyang Huitian 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.Shenyang Huitian vs. Lutian Machinery Co | Shenyang Huitian vs. China Longyuan Power | Shenyang Huitian vs. PetroChina Co Ltd | Shenyang Huitian 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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