Correlation Between Dazhong Transportation and Tianjin Pengling
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By analyzing existing cross correlation between Dazhong Transportation Group and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Dazhong Transportation 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 Dazhong Transportation with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dazhong Transportation and Tianjin Pengling.
Diversification Opportunities for Dazhong Transportation and Tianjin Pengling
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dazhong and Tianjin is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dazhong Transportation Group 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 Dazhong Transportation 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 Dazhong Transportation Group 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 Dazhong Transportation i.e., Dazhong Transportation and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Dazhong Transportation and Tianjin Pengling
Assuming the 90 days trading horizon Dazhong Transportation is expected to generate 1.01 times less return on investment than Tianjin Pengling. But when comparing it to its historical volatility, Dazhong Transportation Group is 1.22 times less risky than Tianjin Pengling. It trades about 0.19 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Tianjin Pengling Rubber on September 7, 2024 and sell it today you would earn a total of 139.00 from holding Tianjin Pengling Rubber or generate 35.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dazhong Transportation Group vs. Tianjin Pengling Rubber
Performance |
Timeline |
Dazhong Transportation |
Tianjin Pengling Rubber |
Dazhong Transportation and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dazhong Transportation and Tianjin Pengling
The main advantage of trading using opposite Dazhong Transportation and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dazhong Transportation 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.Dazhong Transportation vs. Agricultural Bank of | Dazhong Transportation vs. Industrial and Commercial | Dazhong Transportation vs. Bank of China | Dazhong Transportation vs. PetroChina Co Ltd |
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