Correlation Between Caseys General and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Tianjin Capital Environmental, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Tianjin Capital.
Diversification Opportunities for Caseys General and Tianjin Capital
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caseys and Tianjin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores 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 Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and Tianjin Capital go up and down completely randomly.
Pair Corralation between Caseys General and Tianjin Capital
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.99 times more return on investment than Tianjin Capital. However, Caseys General Stores is 1.01 times less risky than Tianjin Capital. It trades about 0.18 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.01 per unit of risk. If you would invest 36,350 in Caseys General Stores on August 30, 2024 and sell it today you would earn a total of 3,050 from holding Caseys General Stores or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Tianjin Capital Environmental
Performance |
| Timeline |
| Caseys General Stores |
| Tianjin Capital Envi |
Caseys General and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Tianjin Capital
The main advantage of trading using opposite Caseys General and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. GFL ENVIRONM | Tianjin Capital vs. Superior Plus Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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