Correlation Between Tianjin Capital and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen, you can compare the effects of market volatilities on Tianjin Capital and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and AmerisourceBergen.
Diversification Opportunities for Tianjin Capital and AmerisourceBergen
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tianjin and AmerisourceBergen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and AmerisourceBergen go up and down completely randomly.
Pair Corralation between Tianjin Capital and AmerisourceBergen
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 3.55 times more return on investment than AmerisourceBergen. However, Tianjin Capital is 3.55 times more volatile than AmerisourceBergen. It trades about 0.06 of its potential returns per unit of risk. AmerisourceBergen is currently generating about 0.08 per unit of risk. If you would invest 19.00 in Tianjin Capital Environmental on September 4, 2024 and sell it today you would earn a total of 19.00 from holding Tianjin Capital Environmental or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. AmerisourceBergen
Performance |
| Timeline |
| Tianjin Capital Envi |
| AmerisourceBergen |
Tianjin Capital and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and AmerisourceBergen
The main advantage of trading using opposite Tianjin Capital and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Republic Services | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. Veolia Environnement SA |
| AmerisourceBergen vs. Superior Plus Corp | AmerisourceBergen vs. NMI Holdings | AmerisourceBergen vs. Origin Agritech | AmerisourceBergen vs. SIVERS SEMICONDUCTORS AB |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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