Correlation Between Anji Microelectronics and Tianjin Pengling
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By analyzing existing cross correlation between Anji Microelectronics Tech and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Anji Microelectronics 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 Anji Microelectronics with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anji Microelectronics and Tianjin Pengling.
Diversification Opportunities for Anji Microelectronics and Tianjin Pengling
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Anji and Tianjin is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Anji Microelectronics Tech 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 Anji Microelectronics 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 Anji Microelectronics Tech 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 Anji Microelectronics i.e., Anji Microelectronics and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Anji Microelectronics and Tianjin Pengling
Assuming the 90 days trading horizon Anji Microelectronics Tech is expected to under-perform the Tianjin Pengling. But the stock apears to be less risky and, when comparing its historical volatility, Anji Microelectronics Tech is 1.04 times less risky than Tianjin Pengling. The stock trades about -0.24 of its potential returns per unit of risk. The Tianjin Pengling Rubber is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Tianjin Pengling Rubber on September 10, 2024 and sell it today you would lose (21.00) from holding Tianjin Pengling Rubber or give up 3.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Anji Microelectronics Tech vs. Tianjin Pengling Rubber
Performance |
Timeline |
Anji Microelectronics |
Tianjin Pengling Rubber |
Anji Microelectronics and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Anji Microelectronics and Tianjin Pengling
The main advantage of trading using opposite Anji Microelectronics and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anji Microelectronics 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 Anji Microelectronics Tech 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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