Correlation Between BJs Wholesale and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale 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 BJs Wholesale and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and Tianjin Capital Environmental, you can compare the effects of market volatilities on BJs Wholesale 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 BJs Wholesale with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Tianjin Capital.
Diversification Opportunities for BJs Wholesale and Tianjin Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and Tianjin is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club 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 BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and Tianjin Capital go up and down completely randomly.
Pair Corralation between BJs Wholesale and Tianjin Capital
Assuming the 90 days horizon BJs Wholesale is expected to generate 3.49 times less return on investment than Tianjin Capital. But when comparing it to its historical volatility, BJs Wholesale Club is 3.49 times less risky than Tianjin Capital. It trades about 0.08 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Tianjin Capital Environmental on November 28, 2024 and sell it today you would earn a total of 17.00 from holding Tianjin Capital Environmental or generate 80.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Tianjin Capital Environmental
Performance |
| Timeline |
| BJs Wholesale Club |
| Tianjin Capital Envi |
BJs Wholesale and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Tianjin Capital
The main advantage of trading using opposite BJs Wholesale and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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.| BJs Wholesale vs. ASPEN TECHINC DL | BJs Wholesale vs. FARO TECHNOLOGIES | BJs Wholesale vs. Uber Technologies | BJs Wholesale vs. GAZTRTECHNIUADR15EO01 |
| Tianjin Capital vs. CanSino Biologics | Tianjin Capital vs. Lendlease Group | Tianjin Capital vs. ScanSource | Tianjin Capital vs. Sixt Leasing SE |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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