Correlation Between Dirui Industrial and Tianjin Pengling
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By analyzing existing cross correlation between Dirui Industrial Co and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Dirui Industrial 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 Dirui Industrial with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dirui Industrial and Tianjin Pengling.
Diversification Opportunities for Dirui Industrial and Tianjin Pengling
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dirui and Tianjin is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dirui Industrial Co 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 Dirui Industrial 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 Dirui Industrial Co 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 Dirui Industrial i.e., Dirui Industrial and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Dirui Industrial and Tianjin Pengling
Assuming the 90 days trading horizon Dirui Industrial is expected to generate 1.15 times less return on investment than Tianjin Pengling. In addition to that, Dirui Industrial is 1.13 times more volatile than Tianjin Pengling Rubber. It trades about 0.12 of its total potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.15 per unit of volatility. If you would invest 396.00 in Tianjin Pengling Rubber on September 10, 2024 and sell it today you would earn a total of 134.00 from holding Tianjin Pengling Rubber or generate 33.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dirui Industrial Co vs. Tianjin Pengling Rubber
Performance |
Timeline |
Dirui Industrial |
Tianjin Pengling Rubber |
Dirui Industrial and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dirui Industrial and Tianjin Pengling
The main advantage of trading using opposite Dirui Industrial and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dirui Industrial 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.Dirui Industrial vs. Industrial and Commercial | Dirui Industrial vs. Agricultural Bank of | Dirui Industrial vs. China Construction Bank | Dirui Industrial vs. Bank of China |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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