Correlation Between Tianjin Capital and EQT AB
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and EQT AB 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 Tianjin Capital and EQT AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tianjin Capital Environmental and EQT AB, you can compare the effects of market volatilities on Tianjin Capital and EQT AB 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 Tianjin Capital with a short position of EQT AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and EQT AB.
Diversification Opportunities for Tianjin Capital and EQT AB
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tianjin and EQT is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and EQT AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT AB and Tianjin Capital 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 Tianjin Capital Environmental are associated (or correlated) with EQT AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT AB has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and EQT AB go up and down completely randomly.
Pair Corralation between Tianjin Capital and EQT AB
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.99 times more return on investment than EQT AB. However, Tianjin Capital Environmental is 1.01 times less risky than EQT AB. It trades about -0.07 of its potential returns per unit of risk. EQT AB is currently generating about -0.11 per unit of risk. If you would invest 39.00 in Tianjin Capital Environmental on November 29, 2024 and sell it today you would lose (1.00) from holding Tianjin Capital Environmental or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. EQT AB
Performance |
| Timeline |
| Tianjin Capital Envi |
| EQT AB |
Tianjin Capital and EQT AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and EQT AB
The main advantage of trading using opposite Tianjin Capital and EQT AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, EQT AB 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 EQT AB will offset losses from the drop in EQT AB's long position.| Tianjin Capital vs. CORNISH METALS INC | Tianjin Capital vs. China Medical System | Tianjin Capital vs. Apyx Medical Corp | Tianjin Capital vs. CVW CLEANTECH INC |
| EQT AB vs. United Overseas Insurance | EQT AB vs. GRENKELEASING Dusseldorf | EQT AB vs. INSURANCE AUST GRP | EQT AB vs. REVO INSURANCE SPA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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