Correlation Between Sichuan Fulin and Tonghua Grape
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By analyzing existing cross correlation between Sichuan Fulin Transportation and Tonghua Grape Wine, you can compare the effects of market volatilities on Sichuan Fulin 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 Sichuan Fulin with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sichuan Fulin and Tonghua Grape.
Diversification Opportunities for Sichuan Fulin and Tonghua Grape
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sichuan and Tonghua is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sichuan Fulin Transportation 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 Sichuan Fulin 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 Sichuan Fulin Transportation 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 Sichuan Fulin i.e., Sichuan Fulin and Tonghua Grape go up and down completely randomly.
Pair Corralation between Sichuan Fulin and Tonghua Grape
Assuming the 90 days trading horizon Sichuan Fulin Transportation is expected to generate 0.89 times more return on investment than Tonghua Grape. However, Sichuan Fulin Transportation is 1.13 times less risky than Tonghua Grape. It trades about 0.17 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.21 per unit of risk. If you would invest 681.00 in Sichuan Fulin Transportation on November 3, 2024 and sell it today you would earn a total of 51.00 from holding Sichuan Fulin Transportation or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sichuan Fulin Transportation vs. Tonghua Grape Wine
Performance |
| Timeline |
| Sichuan Fulin Transp |
| Tonghua Grape Wine |
Sichuan Fulin and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sichuan Fulin and Tonghua Grape
The main advantage of trading using opposite Sichuan Fulin and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sichuan Fulin 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.| Sichuan Fulin vs. Southern PublishingMedia Co | Sichuan Fulin vs. Beijing Kingsoft Office | Sichuan Fulin vs. Time Publishing and | Sichuan Fulin vs. Shandong Publishing Media |
| Tonghua Grape vs. Shenzhen Noposion Agrochemicals | Tonghua Grape vs. Beijing Mainstreets Investment | Tonghua Grape vs. Beingmate Baby Child | Tonghua Grape vs. Shenzhen Zqgame |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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