Correlation Between Tianjin Capital and WiMi Hologram

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

Diversification Opportunities for Tianjin Capital and WiMi Hologram

-0.5

Correlation Coefficient

Tianjin Capital  WiMi Hologram

Very good diversification

The 3 months correlation between Tianjin and WiMi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tianjin Capital Environmental and WiMi Hologram Cloud in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiMi Hologram Cloud 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 WiMi Hologram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiMi Hologram Cloud has no effect on the direction of Tianjin Capital i.e., Tianjin Capital and WiMi Hologram go up and down completely randomly.

Pair Corralation between Tianjin Capital and WiMi Hologram

Assuming the 90 days horizon Tianjin Capital Environmental is expected to generate 0.79 times more return on investment than WiMi Hologram. However, Tianjin Capital Environmental is 1.26 times less risky than WiMi Hologram. It trades about 0.06 of its potential returns per unit of risk. WiMi Hologram Cloud is currently generating about 0.04 per unit of risk. If you would invest  9.93  in Tianjin Capital Environmental on September 18, 2024 and sell it today you would earn a total of  28.07  from holding Tianjin Capital Environmental or generate 282.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Tianjin Capital Environmental  vs.  WiMi Hologram Cloud

Tianjin Capital Envi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tianjin Capital Environmental are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, Tianjin Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

WiMi Hologram Cloud

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong primary indicators, WiMi Hologram is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Tianjin Capital and WiMi Hologram

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

The idea behind Tianjin Capital Environmental and WiMi Hologram Cloud 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.