Correlation Between TIANDE CHEMICAL and FedEx

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

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

Diversification Opportunities for TIANDE CHEMICAL and FedEx

0.0

Correlation Coefficient

TIANDE CHEMICAL  FedEx

Pay attention - limited upside

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

Pair Corralation between TIANDE CHEMICAL and FedEx

Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 1.72 times more return on investment than FedEx. However, TIANDE CHEMICAL is 1.72 times more volatile than FedEx. It trades about 0.06 of its potential returns per unit of risk. FedEx is currently generating about 0.05 per unit of risk. If you would invest  3.08  in TIANDE CHEMICAL on October 24, 2024 and sell it today you would earn a total of  4.17  from holding TIANDE CHEMICAL or generate 135.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	84.4%
Values	Daily Returns

TIANDE CHEMICAL  vs.  FedEx

TIANDE CHEMICAL

Risk-Adjusted Performance

0 of 100

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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

FedEx

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FedEx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FedEx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with TIANDE CHEMICAL and FedEx

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

The idea behind TIANDE CHEMICAL and FedEx 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.

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.