Correlation Between Tianjin Capital and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Platinum Investment 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 Platinum Investment 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 Platinum Investment Management, you can compare the effects of market volatilities on Tianjin Capital and Platinum Investment 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 Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Platinum Investment.
Diversification Opportunities for Tianjin Capital and Platinum Investment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tianjin and Platinum is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment 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 Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Platinum Investment go up and down completely randomly.
Pair Corralation between Tianjin Capital and Platinum Investment
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 1.82 times more return on investment than Platinum Investment. However, Tianjin Capital is 1.82 times more volatile than Platinum Investment Management. It trades about 0.06 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.01 per unit of risk. If you would invest 12.00 in Tianjin Capital Environmental on September 26, 2024 and sell it today you would earn a total of 27.00 from holding Tianjin Capital Environmental or generate 225.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. Platinum Investment Management
Performance |
| Timeline |
| Tianjin Capital Envi |
| Platinum Investment |
Tianjin Capital and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Platinum Investment
The main advantage of trading using opposite Tianjin Capital and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Platinum Investment 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 Platinum Investment will offset losses from the drop in Platinum Investment's long position.| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Republic Services | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. Veolia Environnement SA |
| Platinum Investment vs. Tianjin Capital Environmental | Platinum Investment vs. DAIRY FARM INTL | Platinum Investment vs. BlueScope Steel Limited | Platinum Investment 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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