Correlation Between Better Home and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Better Home 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 Better Home and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better Home Finance and Tianjin Capital Environmental, you can compare the effects of market volatilities on Better Home 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 Better Home with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better Home and Tianjin Capital.
Diversification Opportunities for Better Home and Tianjin Capital
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Better and Tianjin is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Better Home Finance 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 Better Home 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 Better Home Finance 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 Better Home i.e., Better Home and Tianjin Capital go up and down completely randomly.
Pair Corralation between Better Home and Tianjin Capital
Assuming the 90 days horizon Better Home Finance is expected to generate 17.13 times more return on investment than Tianjin Capital. However, Better Home is 17.13 times more volatile than Tianjin Capital Environmental. It trades about 0.18 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.1 per unit of risk. If you would invest 4.52 in Better Home Finance on November 2, 2024 and sell it today you would earn a total of 6.48 from holding Better Home Finance or generate 143.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 51.46% |
| Values | Daily Returns |
Better Home Finance vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Better Home Finance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tianjin Capital Envi |
Better Home and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better Home and Tianjin Capital
The main advantage of trading using opposite Better Home and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better Home 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.| Better Home vs. Toro | Better Home vs. Coty Inc | Better Home vs. Ryanair Holdings PLC | Better Home vs. Old Dominion Freight |
| Tianjin Capital vs. Astral Foods Limited | Tianjin Capital vs. Paranovus Entertainment Technology | Tianjin Capital vs. Pinterest | Tianjin Capital vs. Radcom |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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