Correlation Between City Development and Tonghua Grape
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By analyzing existing cross correlation between City Development Environment and Tonghua Grape Wine, you can compare the effects of market volatilities on City Development and Tonghua Grape 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 City Development with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Development and Tonghua Grape.
Diversification Opportunities for City Development and Tonghua Grape
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Tonghua is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding City Development Environment and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine and City Development 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 City Development Environment are associated (or correlated) with Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of City Development i.e., City Development and Tonghua Grape go up and down completely randomly.
Pair Corralation between City Development and Tonghua Grape
Assuming the 90 days trading horizon City Development Environment is expected to generate 0.86 times more return on investment than Tonghua Grape. However, City Development Environment is 1.16 times less risky than Tonghua Grape. It trades about 0.04 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.03 per unit of risk. If you would invest 1,018 in City Development Environment on August 28, 2024 and sell it today you would earn a total of 320.00 from holding City Development Environment or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Development Environment vs. Tonghua Grape Wine
Performance |
| Timeline |
| City Development Env |
| Tonghua Grape Wine |
City Development and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Development and Tonghua Grape
The main advantage of trading using opposite City Development and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Development position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| City Development vs. Zijin Mining Group | City Development vs. Wanhua Chemical Group | City Development vs. Baoshan Iron Steel | City Development vs. Shandong Gold Mining |
| Tonghua Grape vs. BYD Co Ltd | Tonghua Grape vs. China Mobile Limited | Tonghua Grape vs. Agricultural Bank of | Tonghua Grape vs. Industrial and Commercial |
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 CEOs Directory module to screen CEOs from public companies around the world.
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