Correlation Between Tianjin Capital and Sea
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Sea 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 Sea 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 Sea, you can compare the effects of market volatilities on Tianjin Capital and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Sea.
Diversification Opportunities for Tianjin Capital and Sea
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tianjin and Sea is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Sea go up and down completely randomly.
Pair Corralation between Tianjin Capital and Sea
If you would invest 9,405 in Sea on September 1, 2024 and sell it today you would earn a total of 1,975 from holding Sea or generate 21.0% 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. Sea
Performance |
| Timeline |
| Tianjin Capital Envi |
| Sea |
Tianjin Capital and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tianjin Capital and Sea
The main advantage of trading using opposite Tianjin Capital and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Tianjin Capital vs. Legacy Education | Tianjin Capital vs. Apple Inc | Tianjin Capital vs. NVIDIA | Tianjin Capital vs. Microsoft |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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