Correlation Between HNI Corp and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both HNI Corp and Tianjin Capital 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 HNI Corp and Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and Tianjin Capital Environmental, you can compare the effects of market volatilities on HNI Corp and Tianjin Capital 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 HNI Corp with a short position of Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and Tianjin Capital.
Diversification Opportunities for HNI Corp and Tianjin Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HNI and Tianjin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi and HNI Corp 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 HNI Corp are associated (or correlated) with Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of HNI Corp i.e., HNI Corp and Tianjin Capital go up and down completely randomly.
Pair Corralation between HNI Corp and Tianjin Capital
Considering the 90-day investment horizon HNI Corp is expected to generate 2.34 times less return on investment than Tianjin Capital. But when comparing it to its historical volatility, HNI Corp is 3.2 times less risky than Tianjin Capital. It trades about 0.09 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.93 in Tianjin Capital Environmental on September 18, 2024 and sell it today you would earn a total of 28.07 from holding Tianjin Capital Environmental or generate 282.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
HNI Corp vs. Tianjin Capital Environmental
Performance |
Timeline |
HNI Corp |
Tianjin Capital Envi |
HNI Corp and Tianjin Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HNI Corp and Tianjin Capital
The main advantage of trading using opposite HNI Corp and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.HNI Corp vs. Genpact Limited | HNI Corp vs. Broadridge Financial Solutions | HNI Corp vs. BrightView Holdings | HNI Corp vs. First Advantage Corp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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