Correlation Between ABO GROUP and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both ABO GROUP and Tianjin Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ABO GROUP and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABO GROUP ENVIRONMENT and Tianjin Capital Environmental, you can compare the effects of market volatilities on ABO GROUP 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 ABO GROUP with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABO GROUP and Tianjin Capital.
Diversification Opportunities for ABO GROUP and Tianjin Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABO and Tianjin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ABO GROUP 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 ABO GROUP 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 ABO GROUP 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 ABO GROUP i.e., ABO GROUP and Tianjin Capital go up and down completely randomly.
Pair Corralation between ABO GROUP and Tianjin Capital
Assuming the 90 days trading horizon ABO GROUP ENVIRONMENT is expected to under-perform the Tianjin Capital. But the stock apears to be less risky and, when comparing its historical volatility, ABO GROUP ENVIRONMENT is 1.25 times less risky than Tianjin Capital. The stock trades about -0.26 of its potential returns per unit of risk. The Tianjin Capital Environmental is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 37.00 in Tianjin Capital Environmental on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Tianjin Capital Environmental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABO GROUP ENVIRONMENT vs. Tianjin Capital Environmental
Performance |
| Timeline |
| ABO GROUP ENVIRONMENT |
| Tianjin Capital Envi |
ABO GROUP and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABO GROUP and Tianjin Capital
The main advantage of trading using opposite ABO GROUP and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABO GROUP 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.The idea behind ABO GROUP ENVIRONMENT and Tianjin Capital Environmental 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.| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. GFL ENVIRONM | Tianjin Capital vs. Superior Plus Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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