Correlation Between Tianjin Capital and AerCap Holdings

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

Diversification Opportunities for Tianjin Capital and AerCap Holdings

0.0

Correlation Coefficient

Tianjin Capital  AerCap Holdings

Pay attention - limited upside

The 3 months correlation between Tianjin and AerCap is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and AerCap Holdings go up and down completely randomly.

Pair Corralation between Tianjin Capital and AerCap Holdings

If you would invest  9,427  in AerCap Holdings NV on December 20, 2024 and sell it today you would earn a total of  1,008  from holding AerCap Holdings NV or generate 10.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Tianjin Capital Environmental  vs.  AerCap Holdings NV

Tianjin Capital Envi

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tianjin Capital Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Tianjin Capital is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AerCap Holdings NV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, AerCap Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tianjin Capital and AerCap Holdings

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

The idea behind Tianjin Capital Environmental and AerCap Holdings NV 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.