Correlation Between Tianjin Capital and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Tianjin Capital and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and WIMFARM SA.
Diversification Opportunities for Tianjin Capital and WIMFARM SA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tianjin and WIMFARM is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and WIMFARM SA go up and down completely randomly.
Pair Corralation between Tianjin Capital and WIMFARM SA
Assuming the 90 days horizon Tianjin Capital Environmental is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, Tianjin Capital Environmental is 3.4 times less risky than WIMFARM SA. The stock trades about -0.07 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 384.00 in WIMFARM SA EO on December 30, 2024 and sell it today you would earn a total of 5.00 from holding WIMFARM SA EO or generate 1.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tianjin Capital Environmental vs. WIMFARM SA EO
Performance |
Timeline |
Tianjin Capital Envi |
WIMFARM SA EO |
Tianjin Capital and WIMFARM SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tianjin Capital and WIMFARM SA
The main advantage of trading using opposite Tianjin Capital and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.Tianjin Capital vs. Value Management Research | Tianjin Capital vs. MCEWEN MINING INC | Tianjin Capital vs. CeoTronics AG | Tianjin Capital vs. Ares Management 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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