Correlation Between TPV Technology and Bohai Leasing

Can any of the company-specific risk be diversified away by investing in both TPV Technology and Bohai Leasing 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 TPV Technology and Bohai Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TPV Technology Co and Bohai Leasing Co, you can compare the effects of market volatilities on TPV Technology and Bohai Leasing 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 TPV Technology with a short position of Bohai Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPV Technology and Bohai Leasing.

Diversification Opportunities for TPV Technology and Bohai Leasing

0.76

Correlation Coefficient

TPV Technology  Bohai Leasing

Poor diversification

The 3 months correlation between TPV and Bohai is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TPV Technology Co and Bohai Leasing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bohai Leasing and TPV Technology 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 TPV Technology Co are associated (or correlated) with Bohai Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bohai Leasing has no effect on the direction of TPV Technology i.e., TPV Technology and Bohai Leasing go up and down completely randomly.

Pair Corralation between TPV Technology and Bohai Leasing

Assuming the 90 days trading horizon TPV Technology Co is expected to under-perform the Bohai Leasing. In addition to that, TPV Technology is 1.97 times more volatile than Bohai Leasing Co. It trades about -0.37 of its total potential returns per unit of risk. Bohai Leasing Co is currently generating about -0.5 per unit of volatility. If you would invest  420.00  in Bohai Leasing Co on October 8, 2024 and sell it today you would lose (72.00) from holding Bohai Leasing Co or give up 17.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

TPV Technology Co  vs.  Bohai Leasing Co

TPV Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TPV Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, TPV Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bohai Leasing

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bohai Leasing Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Bohai Leasing sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TPV Technology and Bohai Leasing

The main advantage of trading using opposite TPV Technology and Bohai Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPV Technology position performs unexpectedly, Bohai Leasing 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 Bohai Leasing will offset losses from the drop in Bohai Leasing's long position.

The idea behind TPV Technology Co and Bohai Leasing Co 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.