Correlation Between Central Plains and Tianjin Capital
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By analyzing existing cross correlation between Central Plains Environment and Tianjin Capital Environmental, you can compare the effects of market volatilities on Central Plains and Tianjin Capital 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 Central Plains with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Plains and Tianjin Capital.
Diversification Opportunities for Central Plains and Tianjin Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Central and Tianjin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Central Plains Environment and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi and Central Plains 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 Central Plains Environment are associated (or correlated) with Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Central Plains i.e., Central Plains and Tianjin Capital go up and down completely randomly.
Pair Corralation between Central Plains and Tianjin Capital
Assuming the 90 days trading horizon Central Plains Environment is expected to generate 1.34 times more return on investment than Tianjin Capital. However, Central Plains is 1.34 times more volatile than Tianjin Capital Environmental. It trades about 0.02 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.09 per unit of risk. If you would invest 880.00 in Central Plains Environment on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Central Plains Environment or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Plains Environment vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Central Plains Envir |
| Tianjin Capital Envi |
Central Plains and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Plains and Tianjin Capital
The main advantage of trading using opposite Central Plains and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Plains position performs unexpectedly, Tianjin Capital 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 Capital will offset losses from the drop in Tianjin Capital's long position.| Central Plains vs. Shanghai Action Education | Central Plains vs. Bomesc Offshore Engineering | Central Plains vs. Changzhou Evergreen Technology | Central Plains vs. Changjiang Publishing Media |
| Tianjin Capital vs. China Petroleum Chemical | Tianjin Capital vs. PetroChina Co Ltd | Tianjin Capital vs. China State Construction | Tianjin Capital vs. China Railway Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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