Correlation Between Tianjin Capital and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Tianjin Capital and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Jacquet Metal.
Diversification Opportunities for Tianjin Capital and Jacquet Metal
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Jacquet is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Jacquet Metal go up and down completely randomly.
Pair Corralation between Tianjin Capital and Jacquet Metal
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 2.81 times more return on investment than Jacquet Metal. However, Tianjin Capital is 2.81 times more volatile than Jacquet Metal Service. It trades about 0.07 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.01 per unit of risk. If you would invest 18.00 in Tianjin Capital Environmental on August 26, 2024 and sell it today you would earn a total of 20.00 from holding Tianjin Capital Environmental or generate 111.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Jacquet Metal Service
Performance |
| Timeline |
| Tianjin Capital Envi |
| Jacquet Metal Service |
Tianjin Capital and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Jacquet Metal
The main advantage of trading using opposite Tianjin Capital and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Tianjin Capital vs. Superior Plus Corp | Tianjin Capital vs. NMI Holdings | Tianjin Capital vs. Origin Agritech | Tianjin Capital vs. SIVERS SEMICONDUCTORS AB |
| Jacquet Metal vs. ArcelorMittal SA | Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. Nippon Steel | Jacquet Metal vs. NIPPON STEEL SPADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |