Correlation Between Tieling Newcity and ROPEOK Technology

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

By analyzing existing cross correlation between Tieling Newcity Investment and ROPEOK Technology Group, you can compare the effects of market volatilities on Tieling Newcity and ROPEOK Technology 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 Tieling Newcity with a short position of ROPEOK Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and ROPEOK Technology.

Diversification Opportunities for Tieling Newcity and ROPEOK Technology

-0.35

Correlation Coefficient

Tieling Newcity  ROPEOK Technology

Very good diversification

The 3 months correlation between Tieling and ROPEOK is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and ROPEOK Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROPEOK Technology and Tieling Newcity 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 Tieling Newcity Investment are associated (or correlated) with ROPEOK Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROPEOK Technology has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and ROPEOK Technology go up and down completely randomly.

Pair Corralation between Tieling Newcity and ROPEOK Technology

Assuming the 90 days trading horizon Tieling Newcity Investment is expected to generate 0.86 times more return on investment than ROPEOK Technology. However, Tieling Newcity Investment is 1.16 times less risky than ROPEOK Technology. It trades about 0.04 of its potential returns per unit of risk. ROPEOK Technology Group is currently generating about -0.02 per unit of risk. If you would invest  301.00  in Tieling Newcity Investment on December 30, 2024 and sell it today you would earn a total of  11.00  from holding Tieling Newcity Investment or generate 3.65% return on investment over 90 days.

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

Tieling Newcity Investment  vs.  ROPEOK Technology Group

Tieling Newcity Inve

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tieling Newcity Investment are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tieling Newcity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ROPEOK Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days ROPEOK Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ROPEOK Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tieling Newcity and ROPEOK Technology

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

The idea behind Tieling Newcity Investment and ROPEOK Technology Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.