Correlation Between Shenzhen Changfang and Tianjin Pengling
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By analyzing existing cross correlation between Shenzhen Changfang Light and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Shenzhen Changfang 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 Shenzhen Changfang with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Changfang and Tianjin Pengling.
Diversification Opportunities for Shenzhen Changfang and Tianjin Pengling
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shenzhen and Tianjin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Changfang Light 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 Shenzhen Changfang 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 Shenzhen Changfang Light 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 Shenzhen Changfang i.e., Shenzhen Changfang and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Shenzhen Changfang and Tianjin Pengling
Assuming the 90 days trading horizon Shenzhen Changfang Light is expected to generate 1.09 times more return on investment than Tianjin Pengling. However, Shenzhen Changfang is 1.09 times more volatile than Tianjin Pengling Rubber. It trades about 0.21 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 120.00 in Shenzhen Changfang Light on September 10, 2024 and sell it today you would earn a total of 68.00 from holding Shenzhen Changfang Light or generate 56.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Shenzhen Changfang Light vs. Tianjin Pengling Rubber
Performance |
Timeline |
Shenzhen Changfang Light |
Tianjin Pengling Rubber |
Shenzhen Changfang and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shenzhen Changfang and Tianjin Pengling
The main advantage of trading using opposite Shenzhen Changfang and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Changfang 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.Shenzhen Changfang vs. Shenzhen Centralcon Investment | Shenzhen Changfang vs. Zoje Resources Investment | Shenzhen Changfang vs. De Rucci Healthy | Shenzhen Changfang vs. Sanbo Hospital Management |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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