Correlation Between Tianjin Capital and Eit Environmental
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By analyzing existing cross correlation between Tianjin Capital Environmental and Eit Environmental Development, you can compare the effects of market volatilities on Tianjin Capital and Eit Environmental 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 Tianjin Capital with a short position of Eit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Eit Environmental.
Diversification Opportunities for Tianjin Capital and Eit Environmental
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tianjin and Eit is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Eit Environmental Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eit Environmental and Tianjin Capital 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 Tianjin Capital Environmental are associated (or correlated) with Eit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eit Environmental has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Eit Environmental go up and down completely randomly.
Pair Corralation between Tianjin Capital and Eit Environmental
Assuming the 90 days trading horizon Tianjin Capital is expected to generate 23.06 times less return on investment than Eit Environmental. But when comparing it to its historical volatility, Tianjin Capital Environmental is 1.67 times less risky than Eit Environmental. It trades about 0.0 of its potential returns per unit of risk. Eit Environmental Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,269 in Eit Environmental Development on August 30, 2024 and sell it today you would earn a total of 279.00 from holding Eit Environmental Development or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Eit Environmental Development
Performance |
| Timeline |
| Tianjin Capital Envi |
| Eit Environmental |
Tianjin Capital and Eit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Eit Environmental
The main advantage of trading using opposite Tianjin Capital and Eit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Eit Environmental 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 Eit Environmental will offset losses from the drop in Eit Environmental's long position.| Tianjin Capital vs. PetroChina Co Ltd | Tianjin Capital vs. China State Construction | Tianjin Capital vs. China Mobile Limited | Tianjin Capital vs. Industrial and Commercial |
| Eit Environmental vs. PetroChina Co Ltd | Eit Environmental vs. China State Construction | Eit Environmental vs. China Mobile Limited | Eit Environmental vs. Industrial and Commercial |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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