Correlation Between Tianjin Capital and AXA SA
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and AXA SA 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 AXA SA 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 AXA SA, you can compare the effects of market volatilities on Tianjin Capital and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and AXA SA.
Diversification Opportunities for Tianjin Capital and AXA SA
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tianjin and AXA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and AXA SA go up and down completely randomly.
Pair Corralation between Tianjin Capital and AXA SA
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 3.87 times more return on investment than AXA SA. However, Tianjin Capital is 3.87 times more volatile than AXA SA. It trades about 0.06 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 per unit of risk. If you would invest 19.00 in Tianjin Capital Environmental on August 31, 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 Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. AXA SA
Performance |
| Timeline |
| Tianjin Capital Envi |
| AXA SA |
Tianjin Capital and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and AXA SA
The main advantage of trading using opposite Tianjin Capital and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.| Tianjin Capital vs. Altair Engineering | Tianjin Capital vs. Air New Zealand | Tianjin Capital vs. SCIENCE IN SPORT | Tianjin Capital vs. WIZZ AIR HLDGUNSPADR4 |
| AXA SA vs. Automatic Data Processing | AXA SA vs. SBA Communications Corp | AXA SA vs. TERADATA | AXA SA vs. China Communications Services |
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 Correlations module to find global opportunities by holding instruments from different markets.
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