Correlation Between Sino-Platinum Metals and Tianjin Pengling
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By analyzing existing cross correlation between Sino Platinum Metals Co and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Sino-Platinum Metals 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 Sino-Platinum Metals with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino-Platinum Metals and Tianjin Pengling.
Diversification Opportunities for Sino-Platinum Metals and Tianjin Pengling
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sino-Platinum and Tianjin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sino Platinum Metals 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 Sino-Platinum Metals 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 Sino Platinum Metals 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 Sino-Platinum Metals i.e., Sino-Platinum Metals and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Sino-Platinum Metals and Tianjin Pengling
Assuming the 90 days trading horizon Sino Platinum Metals Co is expected to under-perform the Tianjin Pengling. But the stock apears to be less risky and, when comparing its historical volatility, Sino Platinum Metals Co is 1.67 times less risky than Tianjin Pengling. The stock trades about -0.22 of its potential returns per unit of risk. The Tianjin Pengling Rubber is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Tianjin Pengling Rubber on September 11, 2024 and sell it today you would lose (19.00) from holding Tianjin Pengling Rubber or give up 3.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sino Platinum Metals Co vs. Tianjin Pengling Rubber
Performance |
Timeline |
Sino Platinum Metals |
Tianjin Pengling Rubber |
Sino-Platinum Metals and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sino-Platinum Metals and Tianjin Pengling
The main advantage of trading using opposite Sino-Platinum Metals and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino-Platinum Metals 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 Sino Platinum Metals Co 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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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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