Correlation Between Tianjin Capital and CEZ A
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and CEZ A 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 CEZ A 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 CEZ a s, you can compare the effects of market volatilities on Tianjin Capital and CEZ A 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 CEZ A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and CEZ A.
Diversification Opportunities for Tianjin Capital and CEZ A
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianjin and CEZ is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and CEZ a s in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ a s 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ a s has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and CEZ A go up and down completely randomly.
Pair Corralation between Tianjin Capital and CEZ A
Assuming the 90 days horizon Tianjin Capital is expected to generate 1.88 times less return on investment than CEZ A. In addition to that, Tianjin Capital is 2.07 times more volatile than CEZ a s. It trades about 0.07 of its total potential returns per unit of risk. CEZ a s is currently generating about 0.27 per unit of volatility. If you would invest 3,574 in CEZ a s on September 4, 2024 and sell it today you would earn a total of 222.00 from holding CEZ a s or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. CEZ a s
Performance |
| Timeline |
| Tianjin Capital Envi |
| CEZ a s |
Tianjin Capital and CEZ A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and CEZ A
The main advantage of trading using opposite Tianjin Capital and CEZ A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, CEZ A 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 CEZ A will offset losses from the drop in CEZ A's long position.| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Republic Services | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. Veolia Environnement SA |
| CEZ A vs. Charter Communications | CEZ A vs. Uber Technologies | CEZ A vs. SBA Communications Corp | CEZ A vs. Cogent Communications Holdings |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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