Correlation Between Tianjin Capital and BTG Hotels
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By analyzing existing cross correlation between Tianjin Capital Environmental and BTG Hotels Group, you can compare the effects of market volatilities on Tianjin Capital and BTG Hotels 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 BTG Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and BTG Hotels.
Diversification Opportunities for Tianjin Capital and BTG Hotels
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and BTG is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and BTG Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Hotels Group 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 BTG Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Hotels Group has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and BTG Hotels go up and down completely randomly.
Pair Corralation between Tianjin Capital and BTG Hotels
Assuming the 90 days trading horizon Tianjin Capital is expected to generate 2.08 times less return on investment than BTG Hotels. But when comparing it to its historical volatility, Tianjin Capital Environmental is 1.19 times less risky than BTG Hotels. It trades about 0.04 of its potential returns per unit of risk. BTG Hotels Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,261 in BTG Hotels Group on September 27, 2024 and sell it today you would earn a total of 232.00 from holding BTG Hotels Group or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. BTG Hotels Group
Performance |
| Timeline |
| Tianjin Capital Envi |
| BTG Hotels Group |
Tianjin Capital and BTG Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and BTG Hotels
The main advantage of trading using opposite Tianjin Capital and BTG Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, BTG Hotels 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 BTG Hotels will offset losses from the drop in BTG Hotels' long position.| Tianjin Capital vs. Ming Yang Smart | Tianjin Capital vs. 159681 | Tianjin Capital vs. 159005 | Tianjin Capital vs. Loctek Ergonomic Technology |
| BTG Hotels vs. Bank of China | BTG Hotels vs. Kweichow Moutai Co | BTG Hotels vs. PetroChina Co Ltd | BTG Hotels vs. Bank of Communications |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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