Correlation Between Tianjin Pengling and By Health

Can any of the company-specific risk be diversified away by investing in both Tianjin Pengling and By Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tianjin Pengling and By Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tianjin Pengling Rubber and By health, you can compare the effects of market volatilities on Tianjin Pengling and By Health 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 Tianjin Pengling with a short position of By Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Pengling and By Health.

Diversification Opportunities for Tianjin Pengling and By Health

0.74

Correlation Coefficient

Tianjin Pengling  By Health

Poor diversification

The 3 months correlation between Tianjin and 300146 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Pengling Rubber and By health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on By health and Tianjin Pengling 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 Tianjin Pengling Rubber are associated (or correlated) with By Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of By health has no effect on the direction of Tianjin Pengling i.e., Tianjin Pengling and By Health go up and down completely randomly.

Pair Corralation between Tianjin Pengling and By Health

Assuming the 90 days trading horizon Tianjin Pengling Rubber is expected to under-perform the By Health. In addition to that, Tianjin Pengling is 2.13 times more volatile than By health. It trades about -0.36 of its total potential returns per unit of risk. By health is currently generating about -0.68 per unit of volatility. If you would invest  1,324  in By health on October 15, 2024 and sell it today you would lose (207.00) from holding By health or give up 15.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Tianjin Pengling Rubber  vs.  By health

Tianjin Pengling Rubber

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tianjin Pengling Rubber has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

By health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days By health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Tianjin Pengling and By Health

The main advantage of trading using opposite Tianjin Pengling and By Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Pengling position performs unexpectedly, By Health 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 By Health will offset losses from the drop in By Health's long position.

The idea behind Tianjin Pengling Rubber and By health pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.