Correlation Between Tianjin Capital and Avanos Medical
Can any of the company-specific risk be diversified away by investing in both Tianjin Capital and Avanos Medical 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 Avanos Medical 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 Avanos Medical, you can compare the effects of market volatilities on Tianjin Capital and Avanos Medical 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 Avanos Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tianjin Capital and Avanos Medical.
Diversification Opportunities for Tianjin Capital and Avanos Medical
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tianjin and Avanos is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and Avanos Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanos Medical 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 Avanos Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanos Medical has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and Avanos Medical go up and down completely randomly.
Pair Corralation between Tianjin Capital and Avanos Medical
Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.79 times more return on investment than Avanos Medical. However, Tianjin Capital Environmental is 1.26 times less risky than Avanos Medical. It trades about -0.07 of its potential returns per unit of risk. Avanos Medical is currently generating about -0.1 per unit of risk. If you would invest 40.00 in Tianjin Capital Environmental on December 30, 2024 and sell it today you would lose (3.00) from holding Tianjin Capital Environmental or give up 7.5% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tianjin Capital Environmental vs. Avanos Medical
Performance |
Timeline |
Tianjin Capital Envi |
Avanos Medical |
Tianjin Capital and Avanos Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tianjin Capital and Avanos Medical
The main advantage of trading using opposite Tianjin Capital and Avanos Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tianjin Capital position performs unexpectedly, Avanos Medical 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 Avanos Medical will offset losses from the drop in Avanos Medical'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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