Correlation Between Jiangsu Xinning and Tianjin Pengling
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By analyzing existing cross correlation between Jiangsu Xinning Modern and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Jiangsu Xinning 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 Jiangsu Xinning with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Xinning and Tianjin Pengling.
Diversification Opportunities for Jiangsu Xinning and Tianjin Pengling
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jiangsu and Tianjin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Xinning Modern 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 Jiangsu Xinning 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 Jiangsu Xinning Modern 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 Jiangsu Xinning i.e., Jiangsu Xinning and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Jiangsu Xinning and Tianjin Pengling
Assuming the 90 days trading horizon Jiangsu Xinning Modern is expected to generate 1.22 times more return on investment than Tianjin Pengling. However, Jiangsu Xinning is 1.22 times more volatile than Tianjin Pengling Rubber. It trades about 0.24 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 249.00 in Jiangsu Xinning Modern on September 9, 2024 and sell it today you would earn a total of 198.00 from holding Jiangsu Xinning Modern or generate 79.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Jiangsu Xinning Modern vs. Tianjin Pengling Rubber
Performance |
Timeline |
Jiangsu Xinning Modern |
Tianjin Pengling Rubber |
Jiangsu Xinning and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jiangsu Xinning and Tianjin Pengling
The main advantage of trading using opposite Jiangsu Xinning and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Xinning 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.Jiangsu Xinning vs. Gan Yuan Foods | Jiangsu Xinning vs. Guilin Seamild Foods | Jiangsu Xinning vs. Northking Information Technology | Jiangsu Xinning vs. Zhengzhou Qianweiyangchu Food |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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