Correlation Between ANGLO ASIAN and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN 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 ANGLO ASIAN and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and Tianjin Capital Environmental, you can compare the effects of market volatilities on ANGLO ASIAN 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 ANGLO ASIAN with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and Tianjin Capital.
Diversification Opportunities for ANGLO ASIAN and Tianjin Capital
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANGLO and Tianjin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING 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 ANGLO ASIAN 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 ANGLO ASIAN MINING 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 ANGLO ASIAN i.e., ANGLO ASIAN and Tianjin Capital go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and Tianjin Capital
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 2.24 times more return on investment than Tianjin Capital. However, ANGLO ASIAN is 2.24 times more volatile than Tianjin Capital Environmental. It trades about 0.06 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about -0.22 per unit of risk. If you would invest 126.00 in ANGLO ASIAN MINING on October 29, 2024 and sell it today you would earn a total of 3.00 from holding ANGLO ASIAN MINING or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. Tianjin Capital Environmental
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| Tianjin Capital Envi |
ANGLO ASIAN and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and Tianjin Capital
The main advantage of trading using opposite ANGLO ASIAN and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN 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.| ANGLO ASIAN vs. CAL MAINE FOODS | ANGLO ASIAN vs. United Insurance Holdings | ANGLO ASIAN vs. United Natural Foods | ANGLO ASIAN vs. SENECA FOODS A |
| Tianjin Capital vs. NH Foods | Tianjin Capital vs. Maple Leaf Foods | Tianjin Capital vs. Nomad Foods | Tianjin Capital vs. MAGNUM MINING EXP |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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