Correlation Between Shanghai Lingyun and Tianjin Pengling
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Tianjin Pengling Rubber, you can compare the effects of market volatilities on Shanghai Lingyun 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 Shanghai Lingyun with a short position of Tianjin Pengling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Tianjin Pengling.
Diversification Opportunities for Shanghai Lingyun and Tianjin Pengling
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Shanghai and Tianjin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries 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 Shanghai Lingyun 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 Shanghai Lingyun Industries 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 Shanghai Lingyun i.e., Shanghai Lingyun and Tianjin Pengling go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Tianjin Pengling
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to generate 1.19 times more return on investment than Tianjin Pengling. However, Shanghai Lingyun is 1.19 times more volatile than Tianjin Pengling Rubber. It trades about 0.16 of its potential returns per unit of risk. Tianjin Pengling Rubber is currently generating about 0.15 per unit of risk. If you would invest 27.00 in Shanghai Lingyun Industries on September 6, 2024 and sell it today you would earn a total of 12.00 from holding Shanghai Lingyun Industries or generate 44.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.28% |
Values | Daily Returns |
Shanghai Lingyun Industries vs. Tianjin Pengling Rubber
Performance |
Timeline |
Shanghai Lingyun Ind |
Tianjin Pengling Rubber |
Shanghai Lingyun and Tianjin Pengling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Shanghai Lingyun and Tianjin Pengling
The main advantage of trading using opposite Shanghai Lingyun and Tianjin Pengling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun 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.Shanghai Lingyun vs. Dazhong Transportation Group | Shanghai Lingyun vs. Sichuan Hebang Biotechnology | Shanghai Lingyun vs. Jiugui Liquor Co | Shanghai Lingyun vs. Bloomage Biotechnology Corp |
Tianjin Pengling vs. China Construction Bank | Tianjin Pengling vs. Xinke Material | Tianjin Pengling vs. Guangzhou Tinci Materials | Tianjin Pengling vs. Hua Xia Bank |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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