Correlation Between Chuangs China and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both Chuangs China and T.J. Maxx 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 Chuangs China and T.J. Maxx into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and The TJX Companies, you can compare the effects of market volatilities on Chuangs China and T.J. Maxx 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 Chuangs China with a short position of T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and T.J. Maxx.
Diversification Opportunities for Chuangs China and T.J. Maxx
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chuangs and T.J. is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies and Chuangs China 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 Chuangs China Investments are associated (or correlated) with T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of Chuangs China i.e., Chuangs China and T.J. Maxx go up and down completely randomly.
Pair Corralation between Chuangs China and T.J. Maxx
Assuming the 90 days horizon Chuangs China is expected to generate 80.79 times less return on investment than T.J. Maxx. But when comparing it to its historical volatility, Chuangs China Investments is 2.15 times less risky than T.J. Maxx. It trades about 0.0 of its potential returns per unit of risk. The TJX Companies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,050 in The TJX Companies on November 3, 2024 and sell it today you would earn a total of 1,992 from holding The TJX Companies or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. The TJX Companies
Performance |
| Timeline |
| Chuangs China Investments |
| TJX Companies |
Chuangs China and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and T.J. Maxx
The main advantage of trading using opposite Chuangs China and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.| Chuangs China vs. X FAB Silicon Foundries | Chuangs China vs. TRI CHEMICAL LABORATINC | Chuangs China vs. INDO RAMA SYNTHETIC | Chuangs China vs. CITY OFFICE REIT |
| T.J. Maxx vs. HK Electric Investments | T.J. Maxx vs. IDP EDUCATION LTD | T.J. Maxx vs. Guangdong Investment Limited | T.J. Maxx vs. CHINA EDUCATION GROUP |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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