Correlation Between Tianjin Capital and Endeavour Mining

Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining PLC, you can compare the effects of market volatilities on Tianjin Capital and Endeavour Mining 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 Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Endeavour Mining.

Diversification Opportunities for Tianjin Capital and Endeavour Mining

-0.74

Correlation Coefficient

Tianjin Capital  Endeavour Mining

Pay attention - limited upside

The 3 months correlation between Tianjin and Endeavour is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Endeavour Mining go up and down completely randomly.

Pair Corralation between Tianjin Capital and Endeavour Mining

Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.87 times more return on investment than Endeavour Mining. However, Tianjin Capital Environmental is 1.15 times less risky than Endeavour Mining. It trades about 0.03 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about -0.14 per unit of risk. If you would invest  37.00  in Tianjin Capital Environmental on October 25, 2024 and sell it today you would earn a total of  1.00  from holding Tianjin Capital Environmental or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Tianjin Capital Environmental  vs.  Endeavour Mining PLC

Tianjin Capital Envi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Tianjin Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Endeavour Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Tianjin Capital and Endeavour Mining

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

The idea behind Tianjin Capital Environmental and Endeavour Mining PLC 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 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.