Correlation Between Tianshan Aluminum and Cathay Biotech
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By analyzing existing cross correlation between Tianshan Aluminum Group and Cathay Biotech, you can compare the effects of market volatilities on Tianshan Aluminum and Cathay Biotech 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 Tianshan Aluminum with a short position of Cathay Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianshan Aluminum and Cathay Biotech.
Diversification Opportunities for Tianshan Aluminum and Cathay Biotech
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianshan and Cathay is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Tianshan Aluminum Group and Cathay Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Biotech and Tianshan Aluminum 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 Tianshan Aluminum Group are associated (or correlated) with Cathay Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Biotech has no effect on the direction of Tianshan Aluminum i.e., Tianshan Aluminum and Cathay Biotech go up and down completely randomly.
Pair Corralation between Tianshan Aluminum and Cathay Biotech
Assuming the 90 days trading horizon Tianshan Aluminum Group is expected to generate 0.92 times more return on investment than Cathay Biotech. However, Tianshan Aluminum Group is 1.08 times less risky than Cathay Biotech. It trades about 0.11 of its potential returns per unit of risk. Cathay Biotech is currently generating about -0.15 per unit of risk. If you would invest 801.00 in Tianshan Aluminum Group on September 23, 2024 and sell it today you would earn a total of 22.00 from holding Tianshan Aluminum Group or generate 2.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tianshan Aluminum Group vs. Cathay Biotech
Performance |
Timeline |
Tianshan Aluminum |
Cathay Biotech |
Tianshan Aluminum and Cathay Biotech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tianshan Aluminum and Cathay Biotech
The main advantage of trading using opposite Tianshan Aluminum and Cathay Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianshan Aluminum position performs unexpectedly, Cathay Biotech 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 Cathay Biotech will offset losses from the drop in Cathay Biotech's long position.Tianshan Aluminum vs. Inspur Software Co | Tianshan Aluminum vs. Jiangsu Jinling Sports | Tianshan Aluminum vs. Shaanxi Meineng Clean | Tianshan Aluminum vs. Kingclean Electric Co |
Cathay Biotech vs. Zhejiang Yayi Metal | Cathay Biotech vs. Tianshan Aluminum Group | Cathay Biotech vs. Hainan Airlines Co | Cathay Biotech vs. Heilongjiang Transport Development |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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