Correlation Between Ten Ren and Great Wall
Can any of the company-specific risk be diversified away by investing in both Ten Ren and Great Wall 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 Ten Ren and Great Wall into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ten Ren Tea and Great Wall Enterprise, you can compare the effects of market volatilities on Ten Ren and Great Wall 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 Ten Ren with a short position of Great Wall. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ten Ren and Great Wall.
Diversification Opportunities for Ten Ren and Great Wall
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ten and Great is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ten Ren Tea and Great Wall Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Wall Enterprise and Ten Ren 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 Ten Ren Tea are associated (or correlated) with Great Wall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Wall Enterprise has no effect on the direction of Ten Ren i.e., Ten Ren and Great Wall go up and down completely randomly.
Pair Corralation between Ten Ren and Great Wall
Assuming the 90 days trading horizon Ten Ren Tea is expected to under-perform the Great Wall. But the stock apears to be less risky and, when comparing its historical volatility, Ten Ren Tea is 1.41 times less risky than Great Wall. The stock trades about -0.03 of its potential returns per unit of risk. The Great Wall Enterprise is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,110 in Great Wall Enterprise on November 28, 2024 and sell it today you would earn a total of 500.00 from holding Great Wall Enterprise or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ten Ren Tea vs. Great Wall Enterprise
Performance |
| Timeline |
| Ten Ren Tea |
| Great Wall Enterprise |
Ten Ren and Great Wall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ten Ren and Great Wall
The main advantage of trading using opposite Ten Ren and Great Wall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ten Ren position performs unexpectedly, Great Wall 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 Great Wall will offset losses from the drop in Great Wall's long position.| Ten Ren vs. Standard Foods Corp | Ten Ren vs. TTET Union Corp | Ten Ren vs. Great Wall Enterprise | Ten Ren vs. Lian Hwa Foods |
| Great Wall vs. Charoen Pokphand Enterprise | Great Wall vs. Uni President Enterprises Corp | Great Wall vs. Lien Hwa Industrial | Great Wall vs. Standard Foods Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |