Correlation Between Aba Chemicals and Tianjin Pengling
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By analyzing existing cross correlation between Aba Chemicals Corp and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Aba Chemicals 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 Aba Chemicals with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aba Chemicals and Tianjin Pengling.
Diversification Opportunities for Aba Chemicals and Tianjin Pengling
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aba and Tianjin is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Aba Chemicals Corp 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 Aba Chemicals 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 Aba Chemicals Corp 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 Aba Chemicals i.e., Aba Chemicals and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Aba Chemicals and Tianjin Pengling
Assuming the 90 days trading horizon Aba Chemicals Corp is expected to under-perform the Tianjin Pengling. But the stock apears to be less risky and, when comparing its historical volatility, Aba Chemicals Corp is 1.03 times less risky than Tianjin Pengling. The stock trades about -0.01 of its potential returns per unit of risk. The Tianjin Pengling Rubber is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 362.00 in Tianjin Pengling Rubber on September 10, 2024 and sell it today you would earn a total of 168.00 from holding Tianjin Pengling Rubber or generate 46.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aba Chemicals Corp vs. Tianjin Pengling Rubber
Performance |
Timeline |
Aba Chemicals Corp |
Tianjin Pengling Rubber |
Aba Chemicals and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aba Chemicals and Tianjin Pengling
The main advantage of trading using opposite Aba Chemicals and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aba Chemicals 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.Aba Chemicals vs. Shantui Construction Machinery | Aba Chemicals vs. Kunshan Guoli Electronic | Aba Chemicals vs. Lutian Machinery Co | Aba Chemicals vs. Nantong Haixing Electronics |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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