Correlation Between Tianjin Realty and Tianjin Pengling

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

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

Diversification Opportunities for Tianjin Realty and Tianjin Pengling

0.0

Correlation Coefficient

Tianjin Realty  Tianjin Pengling

Pay attention - limited upside

The 3 months correlation between Tianjin and Tianjin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Realty Development 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 Tianjin Realty 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 Realty Development 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 Tianjin Realty i.e., Tianjin Realty and Tianjin Pengling go up and down completely randomly.

Pair Corralation between Tianjin Realty and Tianjin Pengling

If you would invest  394.00  in Tianjin Pengling Rubber on September 9, 2024 and sell it today you would earn a total of  136.00  from holding Tianjin Pengling Rubber or generate 34.52% return on investment over 90 days.

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

Tianjin Realty Development  vs.  Tianjin Pengling Rubber

Tianjin Realty Devel

Risk-Adjusted Performance

0 of 100

Solid

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

Tianjin Pengling Rubber

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Pengling Rubber are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Tianjin Pengling sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tianjin Realty and Tianjin Pengling

The main advantage of trading using opposite Tianjin Realty and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Realty 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.

The idea behind Tianjin Realty Development and Tianjin Pengling Rubber 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.