Correlation Between Tianjin Capital and Summit Materials
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Summit Materials 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 Summit Materials 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 Summit Materials, you can compare the effects of market volatilities on Tianjin Capital and Summit Materials 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 Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Summit Materials.
Diversification Opportunities for Tianjin Capital and Summit Materials
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianjin and Summit is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials 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 Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Summit Materials go up and down completely randomly.
Pair Corralation between Tianjin Capital and Summit Materials
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 2.45 times more return on investment than Summit Materials. However, Tianjin Capital is 2.45 times more volatile than Summit Materials. It trades about 0.07 of its potential returns per unit of risk. Summit Materials is currently generating about 0.06 per unit of risk. If you would invest 11.00 in Tianjin Capital Environmental on October 11, 2024 and sell it today you would earn a total of 28.00 from holding Tianjin Capital Environmental or generate 254.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Summit Materials
Performance |
| Timeline |
| Tianjin Capital Envi |
| Summit Materials |
Tianjin Capital and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Summit Materials
The main advantage of trading using opposite Tianjin Capital and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| Tianjin Capital vs. alstria office REIT AG | Tianjin Capital vs. PT Wintermar Offshore | Tianjin Capital vs. MEDCAW INVESTMENTS LS 01 | Tianjin Capital vs. MidCap Financial Investment |
| Summit Materials vs. Tianjin Capital Environmental | Summit Materials vs. Jacquet Metal Service | Summit Materials vs. ANGANG STEEL H | Summit Materials vs. De Grey Mining |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |