Correlation Between Hubei Forbon and TianJin 712
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By analyzing existing cross correlation between Hubei Forbon Technology and TianJin 712 Communication, you can compare the effects of market volatilities on Hubei Forbon and TianJin 712 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 Hubei Forbon with a short position of TianJin 712. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Forbon and TianJin 712.
Diversification Opportunities for Hubei Forbon and TianJin 712
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hubei and TianJin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Forbon Technology and TianJin 712 Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TianJin 712 Communication and Hubei Forbon 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 Hubei Forbon Technology are associated (or correlated) with TianJin 712. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TianJin 712 Communication has no effect on the direction of Hubei Forbon i.e., Hubei Forbon and TianJin 712 go up and down completely randomly.
Pair Corralation between Hubei Forbon and TianJin 712
Assuming the 90 days trading horizon Hubei Forbon is expected to generate 1.39 times less return on investment than TianJin 712. But when comparing it to its historical volatility, Hubei Forbon Technology is 1.1 times less risky than TianJin 712. It trades about 0.2 of its potential returns per unit of risk. TianJin 712 Communication is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,602 in TianJin 712 Communication on December 11, 2024 and sell it today you would earn a total of 441.00 from holding TianJin 712 Communication or generate 27.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hubei Forbon Technology vs. TianJin 712 Communication
Performance |
Timeline |
Hubei Forbon Technology |
TianJin 712 Communication |
Hubei Forbon and TianJin 712 Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hubei Forbon and TianJin 712
The main advantage of trading using opposite Hubei Forbon and TianJin 712 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Forbon position performs unexpectedly, TianJin 712 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 712 will offset losses from the drop in TianJin 712's long position.Hubei Forbon vs. Gifore Agricultural Machinery | Hubei Forbon vs. Zhengzhou Coal Mining | Hubei Forbon vs. Zhejiang Yinlun Machinery | Hubei Forbon vs. Hainan Airlines Co |
TianJin 712 vs. Dazhong Transportation Group | TianJin 712 vs. Sichuan Fulin Transportation | TianJin 712 vs. China Mobile Limited | TianJin 712 vs. Anhui Jianghuai Automobile |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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