Correlation Between Tianjin Capital and Socit Gnrale
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Socit Gnrale 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 Socit Gnrale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on Tianjin Capital and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Socit Gnrale.
Diversification Opportunities for Tianjin Capital and Socit Gnrale
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Socit is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Socit Gnrale go up and down completely randomly.
Pair Corralation between Tianjin Capital and Socit Gnrale
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 3.32 times more return on investment than Socit Gnrale. However, Tianjin Capital is 3.32 times more volatile than Socit Gnrale Socit. It trades about 0.09 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about -0.02 per unit of risk. If you would invest 21.00 in Tianjin Capital Environmental on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Tianjin Capital Environmental or generate 76.19% 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. Socit Gnrale Socit
Performance |
| Timeline |
| Tianjin Capital Envi |
| Socit Gnrale Socit |
Tianjin Capital and Socit Gnrale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Socit Gnrale
The main advantage of trading using opposite Tianjin Capital and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.| Tianjin Capital vs. Waste Management | Tianjin Capital vs. Waste Connections | Tianjin Capital vs. GFL ENVIRONM | Tianjin Capital vs. Superior Plus Corp |
| Socit Gnrale vs. BNP Paribas SA | Socit Gnrale vs. Deutsche Bank Aktiengesellschaft | Socit Gnrale vs. Santander Bank Polska |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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