Correlation Between NH Foods and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both NH Foods 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 NH Foods and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH Foods and Tianjin Capital Environmental, you can compare the effects of market volatilities on NH Foods 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 NH Foods with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH Foods and Tianjin Capital.
Diversification Opportunities for NH Foods and Tianjin Capital
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NI6 and Tianjin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NH Foods 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 NH Foods 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 NH Foods 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 NH Foods i.e., NH Foods and Tianjin Capital go up and down completely randomly.
Pair Corralation between NH Foods and Tianjin Capital
Assuming the 90 days horizon NH Foods is expected to under-perform the Tianjin Capital. In addition to that, NH Foods is 1.56 times more volatile than Tianjin Capital Environmental. It trades about -0.19 of its total potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.01 per unit of volatility. If you would invest 39.00 in Tianjin Capital Environmental on November 7, 2024 and sell it today you would earn a total of 0.00 from holding Tianjin Capital Environmental or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH Foods vs. Tianjin Capital Environmental
Performance |
| Timeline |
| NH Foods |
| Tianjin Capital Envi |
NH Foods and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH Foods and Tianjin Capital
The main advantage of trading using opposite NH Foods and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH Foods 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.| NH Foods vs. T Mobile | NH Foods vs. Air Lease | NH Foods vs. ecotel communication ag | NH Foods vs. MAVEN WIRELESS SWEDEN |
| Tianjin Capital vs. National Health Investors | Tianjin Capital vs. CEOTRONICS | Tianjin Capital vs. CeoTronics AG | Tianjin Capital vs. Brockhaus Capital Management |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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