Correlation Between Tianjin Capital and National CineMedia
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and National CineMedia 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 National CineMedia 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 National CineMedia, you can compare the effects of market volatilities on Tianjin Capital and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and National CineMedia.
Diversification Opportunities for Tianjin Capital and National CineMedia
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tianjin and National is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and National CineMedia go up and down completely randomly.
Pair Corralation between Tianjin Capital and National CineMedia
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.76 times more return on investment than National CineMedia. However, Tianjin Capital Environmental is 1.31 times less risky than National CineMedia. It trades about 0.15 of its potential returns per unit of risk. National CineMedia is currently generating about 0.05 per unit of risk. If you would invest 34.00 in Tianjin Capital Environmental on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Tianjin Capital Environmental or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tianjin Capital Environmental vs. National CineMedia
Performance |
| Timeline |
| Tianjin Capital Envi |
| National CineMedia |
Tianjin Capital and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and National CineMedia
The main advantage of trading using opposite Tianjin Capital and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| Tianjin Capital vs. Weibo Corp | Tianjin Capital vs. Dave Busters Entertainment | Tianjin Capital vs. Hafnia Limited | Tianjin Capital vs. National CineMedia |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Glory Star New | National CineMedia vs. Impact Fusion International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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