Correlation Between Tianjin Songjiang and Do Fluoride

Can any of the company-specific risk be diversified away by investing in both Tianjin Songjiang and Do Fluoride 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 Songjiang and Do Fluoride into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tianjin Songjiang Co and Do Fluoride Chemicals Co, you can compare the effects of market volatilities on Tianjin Songjiang and Do Fluoride 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 Songjiang with a short position of Do Fluoride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Songjiang and Do Fluoride.

Diversification Opportunities for Tianjin Songjiang and Do Fluoride

0.0

Correlation Coefficient

Tianjin Songjiang  Do Fluoride

Pay attention - limited upside

The 3 months correlation between Tianjin and 002407 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Songjiang Co and Do Fluoride Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Do Fluoride Chemicals and Tianjin Songjiang 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 Songjiang Co are associated (or correlated) with Do Fluoride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Do Fluoride Chemicals has no effect on the direction of Tianjin Songjiang i.e., Tianjin Songjiang and Do Fluoride go up and down completely randomly.

Pair Corralation between Tianjin Songjiang and Do Fluoride

If you would invest  1,246  in Do Fluoride Chemicals Co on October 24, 2024 and sell it today you would lose (81.00) from holding Do Fluoride Chemicals Co or give up 6.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tianjin Songjiang Co  vs.  Do Fluoride Chemicals Co

Tianjin Songjiang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tianjin Songjiang Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tianjin Songjiang is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Do Fluoride Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Do Fluoride Chemicals Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Do Fluoride is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tianjin Songjiang and Do Fluoride

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

The idea behind Tianjin Songjiang Co and Do Fluoride Chemicals Co 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.