Correlation Between Tianjin Capital and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Sekisui Chemical 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 Sekisui Chemical 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 Sekisui Chemical Co, you can compare the effects of market volatilities on Tianjin Capital and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Sekisui Chemical.
Diversification Opportunities for Tianjin Capital and Sekisui Chemical
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Sekisui is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Sekisui Chemical go up and down completely randomly.
Pair Corralation between Tianjin Capital and Sekisui Chemical
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 2.98 times more return on investment than Sekisui Chemical. However, Tianjin Capital is 2.98 times more volatile than Sekisui Chemical Co. It trades about 0.06 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about 0.03 per unit of risk. If you would invest 12.00 in Tianjin Capital Environmental on October 16, 2024 and sell it today you would earn a total of 26.00 from holding Tianjin Capital Environmental or generate 216.67% 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. Sekisui Chemical Co
Performance |
| Timeline |
| Tianjin Capital Envi |
| Sekisui Chemical |
Tianjin Capital and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Sekisui Chemical
The main advantage of trading using opposite Tianjin Capital and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical'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 |
| Sekisui Chemical vs. Tianjin Capital Environmental | Sekisui Chemical vs. Nippon Steel | Sekisui Chemical vs. ALGOMA STEEL GROUP | Sekisui Chemical vs. ANGANG STEEL H |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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