Correlation Between New Hope and Tianjin Pengling
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By analyzing existing cross correlation between New Hope Dairy and Tianjin Pengling Rubber, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Tianjin Pengling.
Diversification Opportunities for New Hope and Tianjin Pengling
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Tianjin is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy 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 New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Tianjin Pengling go up and down completely randomly.
Pair Corralation between New Hope and Tianjin Pengling
Assuming the 90 days trading horizon New Hope Dairy is expected to generate 0.9 times more return on investment than Tianjin Pengling. However, New Hope Dairy is 1.11 times less risky than Tianjin Pengling. It trades about 0.2 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 951.00 in New Hope Dairy on September 10, 2024 and sell it today you would earn a total of 414.00 from holding New Hope Dairy or generate 43.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
New Hope Dairy vs. Tianjin Pengling Rubber
Performance |
Timeline |
New Hope Dairy |
Tianjin Pengling Rubber |
New Hope and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Hope and Tianjin Pengling
The main advantage of trading using opposite New Hope and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.New Hope vs. China Mobile Limited | New Hope vs. Agricultural Bank of | New Hope vs. Industrial and Commercial | New Hope vs. China State Construction |
Tianjin Pengling vs. Soyea Technology Co | Tianjin Pengling vs. Eastroc Beverage Group | Tianjin Pengling vs. Great Sun Foods Co | Tianjin Pengling vs. Guilin Seamild Foods |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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