Correlation Between Tianjin Ruixin and Guangzhou Zhujiang
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By analyzing existing cross correlation between Tianjin Ruixin Technology and Guangzhou Zhujiang Brewery, you can compare the effects of market volatilities on Tianjin Ruixin and Guangzhou Zhujiang 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 Ruixin with a short position of Guangzhou Zhujiang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Ruixin and Guangzhou Zhujiang.
Diversification Opportunities for Tianjin Ruixin and Guangzhou Zhujiang
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Guangzhou is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Ruixin Technology and Guangzhou Zhujiang Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Zhujiang and Tianjin Ruixin 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 Ruixin Technology are associated (or correlated) with Guangzhou Zhujiang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Zhujiang has no effect on the direction of Tianjin Ruixin i.e., Tianjin Ruixin and Guangzhou Zhujiang go up and down completely randomly.
Pair Corralation between Tianjin Ruixin and Guangzhou Zhujiang
Assuming the 90 days trading horizon Tianjin Ruixin Technology is expected to generate 3.46 times more return on investment than Guangzhou Zhujiang. However, Tianjin Ruixin is 3.46 times more volatile than Guangzhou Zhujiang Brewery. It trades about 0.13 of its potential returns per unit of risk. Guangzhou Zhujiang Brewery is currently generating about 0.32 per unit of risk. If you would invest 1,399 in Tianjin Ruixin Technology on September 26, 2024 and sell it today you would earn a total of 200.00 from holding Tianjin Ruixin Technology or generate 14.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tianjin Ruixin Technology vs. Guangzhou Zhujiang Brewery
Performance |
Timeline |
Tianjin Ruixin Technology |
Guangzhou Zhujiang |
Tianjin Ruixin and Guangzhou Zhujiang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tianjin Ruixin and Guangzhou Zhujiang
The main advantage of trading using opposite Tianjin Ruixin and Guangzhou Zhujiang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Ruixin position performs unexpectedly, Guangzhou Zhujiang 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 Guangzhou Zhujiang will offset losses from the drop in Guangzhou Zhujiang's long position.Tianjin Ruixin vs. Wanhua Chemical Group | Tianjin Ruixin vs. Shandong Gold Mining | Tianjin Ruixin vs. Rongsheng Petrochemical Co | Tianjin Ruixin vs. Inner Mongolia BaoTou |
Guangzhou Zhujiang vs. BYD Co Ltd | Guangzhou Zhujiang vs. China Mobile Limited | Guangzhou Zhujiang vs. Agricultural Bank of | Guangzhou Zhujiang vs. Industrial and Commercial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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