Correlation Between Changchun High and Tjk Machinery
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By analyzing existing cross correlation between Changchun High New and Tjk Machinery Tianjin, you can compare the effects of market volatilities on Changchun High and Tjk Machinery 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 Changchun High with a short position of Tjk Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun High and Tjk Machinery.
Diversification Opportunities for Changchun High and Tjk Machinery
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Changchun and Tjk is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Changchun High New and Tjk Machinery Tianjin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tjk Machinery Tianjin and Changchun High 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 Changchun High New are associated (or correlated) with Tjk Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tjk Machinery Tianjin has no effect on the direction of Changchun High i.e., Changchun High and Tjk Machinery go up and down completely randomly.
Pair Corralation between Changchun High and Tjk Machinery
Assuming the 90 days trading horizon Changchun High New is expected to under-perform the Tjk Machinery. But the stock apears to be less risky and, when comparing its historical volatility, Changchun High New is 1.61 times less risky than Tjk Machinery. The stock trades about -0.04 of its potential returns per unit of risk. The Tjk Machinery Tianjin is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,118 in Tjk Machinery Tianjin on September 26, 2024 and sell it today you would earn a total of 234.00 from holding Tjk Machinery Tianjin or generate 20.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Changchun High New vs. Tjk Machinery Tianjin
Performance |
Timeline |
Changchun High New |
Tjk Machinery Tianjin |
Changchun High and Tjk Machinery Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changchun High and Tjk Machinery
The main advantage of trading using opposite Changchun High and Tjk Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun High position performs unexpectedly, Tjk Machinery 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 Tjk Machinery will offset losses from the drop in Tjk Machinery's long position.Changchun High vs. Agricultural Bank of | Changchun High vs. Industrial and Commercial | Changchun High vs. Bank of China | Changchun High vs. China Construction Bank |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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