Correlation Between Tianjin Capital and JD SPORTS
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and JD SPORTS 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 JD SPORTS 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 JD SPORTS FASH, you can compare the effects of market volatilities on Tianjin Capital and JD SPORTS 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 JD SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and JD SPORTS.
Diversification Opportunities for Tianjin Capital and JD SPORTS
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tianjin and 9JD is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and JD SPORTS FASH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD SPORTS FASH 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 JD SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD SPORTS FASH has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and JD SPORTS go up and down completely randomly.
Pair Corralation between Tianjin Capital and JD SPORTS
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.28 times more return on investment than JD SPORTS. However, Tianjin Capital Environmental is 3.55 times less risky than JD SPORTS. It trades about 0.01 of its potential returns per unit of risk. JD SPORTS FASH is currently generating about -0.08 per unit of risk. If you would invest 39.00 in Tianjin Capital Environmental on November 6, 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 | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. JD SPORTS FASH
Performance |
| Timeline |
| Tianjin Capital Envi |
| JD SPORTS FASH |
Tianjin Capital and JD SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and JD SPORTS
The main advantage of trading using opposite Tianjin Capital and JD SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, JD SPORTS 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 JD SPORTS will offset losses from the drop in JD SPORTS's long position.| Tianjin Capital vs. National Health Investors | Tianjin Capital vs. CEOTRONICS | Tianjin Capital vs. CeoTronics AG | Tianjin Capital vs. Brockhaus Capital Management |
| JD SPORTS vs. Eurasia Mining Plc | JD SPORTS vs. Endeavour Mining PLC | JD SPORTS vs. MUTUIONLINE | JD SPORTS vs. Yanzhou Coal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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