Correlation Between Tianjin Capital and PENN NATL
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and PENN NATL 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 PENN NATL 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 PENN NATL GAMING, you can compare the effects of market volatilities on Tianjin Capital and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and PENN NATL.
Diversification Opportunities for Tianjin Capital and PENN NATL
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tianjin and PENN is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and PENN NATL go up and down completely randomly.
Pair Corralation between Tianjin Capital and PENN NATL
Assuming the 90 days horizon Tianjin Capital Environmental is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, Tianjin Capital Environmental is 1.14 times less risky than PENN NATL. The stock trades about -0.07 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,901 in PENN NATL GAMING on November 28, 2024 and sell it today you would earn a total of 68.00 from holding PENN NATL GAMING or generate 3.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. PENN NATL GAMING
Performance |
| Timeline |
| Tianjin Capital Envi |
| PENN NATL GAMING |
Tianjin Capital and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and PENN NATL
The main advantage of trading using opposite Tianjin Capital and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| Tianjin Capital vs. CanSino Biologics | Tianjin Capital vs. Lendlease Group | Tianjin Capital vs. ScanSource | Tianjin Capital vs. Sixt Leasing SE |
| PENN NATL vs. Casio Computer CoLtd | PENN NATL vs. China Communications Construction | PENN NATL vs. VARIOUS EATERIES LS | PENN NATL vs. Singapore Telecommunications Limited |
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.
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