Correlation Between Nanjing Putian and Tianjin Pengling
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By analyzing existing cross correlation between Nanjing Putian Telecommunications and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Nanjing Putian 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 Nanjing Putian with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Putian and Tianjin Pengling.
Diversification Opportunities for Nanjing Putian and Tianjin Pengling
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nanjing and Tianjin is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Putian Telecommunicati 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 Nanjing Putian 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 Nanjing Putian Telecommunications 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 Nanjing Putian i.e., Nanjing Putian and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Nanjing Putian and Tianjin Pengling
Assuming the 90 days trading horizon Nanjing Putian is expected to generate 1.65 times less return on investment than Tianjin Pengling. But when comparing it to its historical volatility, Nanjing Putian Telecommunications is 1.06 times less risky than Tianjin Pengling. It trades about 0.03 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 366.00 in Tianjin Pengling Rubber on September 6, 2024 and sell it today you would earn a total of 167.00 from holding Tianjin Pengling Rubber or generate 45.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nanjing Putian Telecommunicati vs. Tianjin Pengling Rubber
Performance |
Timeline |
Nanjing Putian Telec |
Tianjin Pengling Rubber |
Nanjing Putian and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nanjing Putian and Tianjin Pengling
The main advantage of trading using opposite Nanjing Putian and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Putian 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.Nanjing Putian vs. Industrial and Commercial | Nanjing Putian vs. Agricultural Bank of | Nanjing Putian vs. China Construction Bank | Nanjing Putian vs. Bank of China |
Tianjin Pengling vs. Changchun Engley Automobile | Tianjin Pengling vs. Zhongtong Guomai Communication | Tianjin Pengling vs. Easyhome New Retail | Tianjin Pengling vs. Vohringer Home Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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