Correlation Between Superior Plus and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Tianjin Capital Environmental, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Tianjin Capital.
Diversification Opportunities for Superior Plus and Tianjin Capital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Tianjin is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Tianjin Capital go up and down completely randomly.
Pair Corralation between Superior Plus and Tianjin Capital
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Tianjin Capital. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 2.36 times less risky than Tianjin Capital. The stock trades about -0.05 of its potential returns per unit of risk. The Tianjin Capital Environmental is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Tianjin Capital Environmental on August 24, 2024 and sell it today you would earn a total of 21.00 from holding Tianjin Capital Environmental or generate 123.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Superior Plus Corp |
| Tianjin Capital Envi |
Superior Plus and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Tianjin Capital
The main advantage of trading using opposite Superior Plus and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. SBI Insurance Group | Superior Plus vs. Ping An Insurance | Superior Plus vs. Safety Insurance Group | Superior Plus vs. MSAD INSURANCE |
| Tianjin Capital vs. GFL ENVIRONM | Tianjin Capital vs. Superior Plus Corp | Tianjin Capital vs. NMI Holdings | Tianjin Capital vs. Origin Agritech |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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