Correlation Between TIANDE CHEMICAL and Churchill Downs

Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL and Churchill Downs 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 TIANDE CHEMICAL and Churchill Downs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TIANDE CHEMICAL and Churchill Downs Incorporated, you can compare the effects of market volatilities on TIANDE CHEMICAL and Churchill Downs 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 TIANDE CHEMICAL with a short position of Churchill Downs. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Churchill Downs.

Diversification Opportunities for TIANDE CHEMICAL and Churchill Downs

0.0

Correlation Coefficient

TIANDE CHEMICAL  Churchill Downs

Pay attention - limited upside

The 3 months correlation between TIANDE and Churchill is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Churchill Downs Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Downs and TIANDE CHEMICAL 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 TIANDE CHEMICAL are associated (or correlated) with Churchill Downs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Downs has no effect on the direction of TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Churchill Downs go up and down completely randomly.

Pair Corralation between TIANDE CHEMICAL and Churchill Downs

If you would invest  7.25  in TIANDE CHEMICAL on December 2, 2024 and sell it today you would earn a total of  0.00  from holding TIANDE CHEMICAL or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

TIANDE CHEMICAL  vs.  Churchill Downs Incorporated

TIANDE CHEMICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days TIANDE CHEMICAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TIANDE CHEMICAL is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Churchill Downs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Churchill Downs Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with TIANDE CHEMICAL and Churchill Downs

The main advantage of trading using opposite TIANDE CHEMICAL and Churchill Downs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL position performs unexpectedly, Churchill Downs 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 Churchill Downs will offset losses from the drop in Churchill Downs' long position.

The idea behind TIANDE CHEMICAL and Churchill Downs Incorporated pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.