Correlation Between Guangzhou Zhujiang and Tianjin Ruixin
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By analyzing existing cross correlation between Guangzhou Zhujiang Brewery and Tianjin Ruixin Technology, you can compare the effects of market volatilities on Guangzhou Zhujiang and Tianjin Ruixin 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 Guangzhou Zhujiang with a short position of Tianjin Ruixin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangzhou Zhujiang and Tianjin Ruixin.
Diversification Opportunities for Guangzhou Zhujiang and Tianjin Ruixin
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangzhou and Tianjin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guangzhou Zhujiang Brewery and Tianjin Ruixin Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Ruixin Technology and Guangzhou Zhujiang 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 Guangzhou Zhujiang Brewery are associated (or correlated) with Tianjin Ruixin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Ruixin Technology has no effect on the direction of Guangzhou Zhujiang i.e., Guangzhou Zhujiang and Tianjin Ruixin go up and down completely randomly.
Pair Corralation between Guangzhou Zhujiang and Tianjin Ruixin
Assuming the 90 days trading horizon Guangzhou Zhujiang is expected to generate 1.43 times less return on investment than Tianjin Ruixin. But when comparing it to its historical volatility, Guangzhou Zhujiang Brewery is 3.46 times less risky than Tianjin Ruixin. It trades about 0.32 of its potential returns per unit of risk. Tianjin Ruixin Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,399 in Tianjin Ruixin Technology on September 26, 2024 and sell it today you would earn a total of 200.00 from holding Tianjin Ruixin Technology or generate 14.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guangzhou Zhujiang Brewery vs. Tianjin Ruixin Technology
Performance |
Timeline |
Guangzhou Zhujiang |
Tianjin Ruixin Technology |
Guangzhou Zhujiang and Tianjin Ruixin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guangzhou Zhujiang and Tianjin Ruixin
The main advantage of trading using opposite Guangzhou Zhujiang and Tianjin Ruixin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangzhou Zhujiang position performs unexpectedly, Tianjin Ruixin 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 Ruixin will offset losses from the drop in Tianjin Ruixin's long position.Guangzhou Zhujiang vs. BYD Co Ltd | Guangzhou Zhujiang vs. China Mobile Limited | Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. Industrial and Commercial |
Tianjin Ruixin vs. Wanhua Chemical Group | Tianjin Ruixin vs. Shandong Gold Mining | Tianjin Ruixin vs. Rongsheng Petrochemical Co | Tianjin Ruixin vs. Inner Mongolia BaoTou |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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