Correlation Between Tianjin Capital and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Eskay Mining 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 Eskay Mining 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 Eskay Mining Corp, you can compare the effects of market volatilities on Tianjin Capital and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Eskay Mining.
Diversification Opportunities for Tianjin Capital and Eskay Mining
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tianjin and Eskay is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Eskay Mining go up and down completely randomly.
Pair Corralation between Tianjin Capital and Eskay Mining
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.26 times more return on investment than Eskay Mining. However, Tianjin Capital Environmental is 3.92 times less risky than Eskay Mining. It trades about -0.1 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.07 per unit of risk. If you would invest 39.00 in Tianjin Capital Environmental on October 16, 2024 and sell it today you would lose (1.00) from holding Tianjin Capital Environmental or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Eskay Mining Corp
Performance |
| Timeline |
| Tianjin Capital Envi |
| Eskay Mining Corp |
Tianjin Capital and Eskay Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Eskay Mining
The main advantage of trading using opposite Tianjin Capital and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.| Tianjin Capital vs. Jacquet Metal Service | Tianjin Capital vs. De Grey Mining | Tianjin Capital vs. Erste Group Bank | Tianjin Capital vs. BANKINTER ADR 2007 |
| Eskay Mining vs. Plastic Omnium | Eskay Mining vs. Applied Materials | Eskay Mining vs. Rayonier Advanced Materials | Eskay Mining vs. Heidelberg Materials AG |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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