Correlation Between Tianjin Capital and Five Below
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Five Below 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 Five Below 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 Five Below, you can compare the effects of market volatilities on Tianjin Capital and Five Below 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 Five Below. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Five Below.
Diversification Opportunities for Tianjin Capital and Five Below
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tianjin and Five is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below 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 Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Five Below go up and down completely randomly.
Pair Corralation between Tianjin Capital and Five Below
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.42 times more return on investment than Five Below. However, Tianjin Capital Environmental is 2.36 times less risky than Five Below. It trades about 0.01 of its potential returns per unit of risk. Five Below is currently generating about -0.05 per unit of risk. If you would invest 39.00 in Tianjin Capital Environmental on November 4, 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 Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Five Below
Performance |
| Timeline |
| Tianjin Capital Envi |
| Five Below |
Tianjin Capital and Five Below Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Five Below
The main advantage of trading using opposite Tianjin Capital and Five Below positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Five Below 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 Five Below will offset losses from the drop in Five Below's long position.| Tianjin Capital vs. Aya Gold Silver | Tianjin Capital vs. SCANSOURCE | Tianjin Capital vs. STGEORGE MINING LTD | Tianjin Capital vs. AECOM TECHNOLOGY |
| Five Below vs. DATAGROUP SE | Five Below vs. China Datang | Five Below vs. Datadog | Five Below vs. Pure Storage |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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