Correlation Between Tianjin Capital and CITIC
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and CITIC 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 CITIC 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 CITIC Limited, you can compare the effects of market volatilities on Tianjin Capital and CITIC 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 CITIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and CITIC.
Diversification Opportunities for Tianjin Capital and CITIC
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tianjin and CITIC is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and CITIC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Limited 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 CITIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Limited has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and CITIC go up and down completely randomly.
Pair Corralation between Tianjin Capital and CITIC
Assuming the 90 days horizon Tianjin Capital is expected to generate 2.15 times less return on investment than CITIC. But when comparing it to its historical volatility, Tianjin Capital Environmental is 1.26 times less risky than CITIC. It trades about 0.08 of its potential returns per unit of risk. CITIC Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 23.00 in CITIC Limited on September 3, 2024 and sell it today you would earn a total of 80.00 from holding CITIC Limited or generate 347.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. CITIC Limited
Performance |
| Timeline |
| Tianjin Capital Envi |
| CITIC Limited |
Tianjin Capital and CITIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and CITIC
The main advantage of trading using opposite Tianjin Capital and CITIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, CITIC 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 CITIC will offset losses from the drop in CITIC's long position.| Tianjin Capital vs. PLAY2CHILL SA ZY | Tianjin Capital vs. COLUMBIA SPORTSWEAR | Tianjin Capital vs. GungHo Online Entertainment | Tianjin Capital vs. Lamar Advertising |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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