Correlation Between Tianjin Capital and ANGANG STEEL

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

Diversification Opportunities for Tianjin Capital and ANGANG STEEL

0.19

Correlation Coefficient

Tianjin Capital  ANGANG STEEL

Average diversification

The 3 months correlation between Tianjin and ANGANG is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and ANGANG STEEL go up and down completely randomly.

Pair Corralation between Tianjin Capital and ANGANG STEEL

Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.54 times more return on investment than ANGANG STEEL. However, Tianjin Capital Environmental is 1.84 times less risky than ANGANG STEEL. It trades about 0.06 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about -0.01 per unit of risk. If you would invest  37.00  in Tianjin Capital Environmental on October 23, 2024 and sell it today you would earn a total of  2.00  from holding Tianjin Capital Environmental or generate 5.41% return on investment over 90 days.

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

Tianjin Capital Environmental  vs.  ANGANG STEEL H

Tianjin Capital Envi

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ANGANG STEEL H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGANG STEEL H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ANGANG STEEL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tianjin Capital and ANGANG STEEL

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

The idea behind Tianjin Capital Environmental and ANGANG STEEL H 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.