Correlation Between Tienlen Steel and Agriculture Printing

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

By analyzing existing cross correlation between Tienlen Steel Corp and Agriculture Printing and, you can compare the effects of market volatilities on Tienlen Steel and Agriculture Printing 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 Tienlen Steel with a short position of Agriculture Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tienlen Steel and Agriculture Printing.

Diversification Opportunities for Tienlen Steel and Agriculture Printing

0.65

Correlation Coefficient

Tienlen Steel  Agriculture Printing

Poor diversification

The 3 months correlation between Tienlen and Agriculture is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tienlen Steel Corp and Agriculture Printing and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Printing and and Tienlen Steel 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 Tienlen Steel Corp are associated (or correlated) with Agriculture Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Printing and has no effect on the direction of Tienlen Steel i.e., Tienlen Steel and Agriculture Printing go up and down completely randomly.

Pair Corralation between Tienlen Steel and Agriculture Printing

Assuming the 90 days trading horizon Tienlen Steel Corp is expected to generate 1.21 times more return on investment than Agriculture Printing. However, Tienlen Steel is 1.21 times more volatile than Agriculture Printing and. It trades about 0.26 of its potential returns per unit of risk. Agriculture Printing and is currently generating about 0.1 per unit of risk. If you would invest  430,000  in Tienlen Steel Corp on December 4, 2024 and sell it today you would earn a total of  174,000  from holding Tienlen Steel Corp or generate 40.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.59%
Values	Daily Returns

Tienlen Steel Corp  vs.  Agriculture Printing and

Tienlen Steel Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tienlen Steel Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Tienlen Steel displayed solid returns over the last few months and may actually be approaching a breakup point.

Agriculture Printing and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agriculture Printing and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Agriculture Printing may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tienlen Steel and Agriculture Printing

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

The idea behind Tienlen Steel Corp and Agriculture Printing and 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.