Correlation Between Tianjin Capital and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Deutsche Telekom 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 Deutsche Telekom 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 Deutsche Telekom AG, you can compare the effects of market volatilities on Tianjin Capital and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Deutsche Telekom.
Diversification Opportunities for Tianjin Capital and Deutsche Telekom
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tianjin and Deutsche is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Tianjin Capital and Deutsche Telekom
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 5.5 times more return on investment than Deutsche Telekom. However, Tianjin Capital is 5.5 times more volatile than Deutsche Telekom AG. It trades about 0.07 of its potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.11 per unit of risk. If you would invest 11.00 in Tianjin Capital Environmental on November 6, 2024 and sell it today you would earn a total of 28.00 from holding Tianjin Capital Environmental or generate 254.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Deutsche Telekom AG
Performance |
| Timeline |
| Tianjin Capital Envi |
| Deutsche Telekom |
Tianjin Capital and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Deutsche Telekom
The main advantage of trading using opposite Tianjin Capital and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| Tianjin Capital vs. National Health Investors | Tianjin Capital vs. CEOTRONICS | Tianjin Capital vs. CeoTronics AG | Tianjin Capital vs. Brockhaus Capital Management |
| Deutsche Telekom vs. MHP Hotel AG | Deutsche Telekom vs. Meli Hotels International | Deutsche Telekom vs. PPHE HOTEL GROUP | Deutsche Telekom vs. DALATA HOTEL |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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