Correlation Between Peijia Medical and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Peijia Medical 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 Peijia Medical and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peijia Medical Limited and Tianjin Capital Environmental, you can compare the effects of market volatilities on Peijia Medical 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 Peijia Medical with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peijia Medical and Tianjin Capital.
Diversification Opportunities for Peijia Medical and Tianjin Capital
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peijia and Tianjin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited 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 Peijia Medical 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 Peijia Medical Limited 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 Peijia Medical i.e., Peijia Medical and Tianjin Capital go up and down completely randomly.
Pair Corralation between Peijia Medical and Tianjin Capital
Assuming the 90 days horizon Peijia Medical Limited is expected to generate 1.79 times more return on investment than Tianjin Capital. However, Peijia Medical is 1.79 times more volatile than Tianjin Capital Environmental. It trades about 0.01 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.1 per unit of risk. If you would invest 47.00 in Peijia Medical Limited on October 25, 2024 and sell it today you would earn a total of 0.00 from holding Peijia Medical Limited 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 |
Peijia Medical Limited vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Peijia Medical |
| Tianjin Capital Envi |
Peijia Medical and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peijia Medical and Tianjin Capital
The main advantage of trading using opposite Peijia Medical and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical 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.| Peijia Medical vs. SILVER BULLET DATA | Peijia Medical vs. Teradata Corp | Peijia Medical vs. Sumitomo Mitsui Construction | Peijia Medical vs. Sterling Construction |
| Tianjin Capital vs. MAGNUM MINING EXP | Tianjin Capital vs. Peijia Medical Limited | Tianjin Capital vs. ARDAGH METAL PACDL 0001 | Tianjin Capital vs. Forsys Metals 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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