Correlation Between Beijing Sanyuan and Tianjin Pengling
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By analyzing existing cross correlation between Beijing Sanyuan Foods and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Beijing Sanyuan 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 Beijing Sanyuan with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Sanyuan and Tianjin Pengling.
Diversification Opportunities for Beijing Sanyuan and Tianjin Pengling
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Beijing and Tianjin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Sanyuan Foods 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 Beijing Sanyuan 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 Beijing Sanyuan Foods 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 Beijing Sanyuan i.e., Beijing Sanyuan and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Beijing Sanyuan and Tianjin Pengling
Assuming the 90 days trading horizon Beijing Sanyuan is expected to generate 1.36 times less return on investment than Tianjin Pengling. But when comparing it to its historical volatility, Beijing Sanyuan Foods is 1.72 times less risky than Tianjin Pengling. It trades about 0.2 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Tianjin Pengling Rubber on September 8, 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 | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Beijing Sanyuan Foods vs. Tianjin Pengling Rubber
Performance |
Timeline |
Beijing Sanyuan Foods |
Tianjin Pengling Rubber |
Beijing Sanyuan and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beijing Sanyuan and Tianjin Pengling
The main advantage of trading using opposite Beijing Sanyuan and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Sanyuan 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.Beijing Sanyuan vs. China Petroleum Chemical | Beijing Sanyuan vs. PetroChina Co Ltd | Beijing Sanyuan vs. China State Construction | Beijing Sanyuan vs. China Railway Group |
Tianjin Pengling vs. Holitech Technology Co | Tianjin Pengling vs. AVIC Fund Management | Tianjin Pengling vs. OBiO Technology Corp | Tianjin Pengling vs. Maxvision Technology Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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