Correlation Between Guangdong Wens and Tonghua Grape
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By analyzing existing cross correlation between Guangdong Wens Foodstuff and Tonghua Grape Wine, you can compare the effects of market volatilities on Guangdong Wens 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 Guangdong Wens with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Wens and Tonghua Grape.
Diversification Opportunities for Guangdong Wens and Tonghua Grape
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guangdong and Tonghua is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Wens Foodstuff 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 Guangdong Wens 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 Guangdong Wens Foodstuff 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 Guangdong Wens i.e., Guangdong Wens and Tonghua Grape go up and down completely randomly.
Pair Corralation between Guangdong Wens and Tonghua Grape
Assuming the 90 days trading horizon Guangdong Wens Foodstuff is expected to generate 0.83 times more return on investment than Tonghua Grape. However, Guangdong Wens Foodstuff is 1.21 times less risky than Tonghua Grape. It trades about 0.0 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 1,824 in Guangdong Wens Foodstuff on September 3, 2024 and sell it today you would lose (90.00) from holding Guangdong Wens Foodstuff or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Wens Foodstuff vs. Tonghua Grape Wine
Performance |
| Timeline |
| Guangdong Wens Foodstuff |
| Tonghua Grape Wine |
Guangdong Wens and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Wens and Tonghua Grape
The main advantage of trading using opposite Guangdong Wens and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Wens 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.| Guangdong Wens vs. Beijing Wantai Biological | Guangdong Wens vs. Aluminum Corp of | Guangdong Wens vs. COL Digital Publishing | Guangdong Wens vs. Shaanxi Meineng Clean |
| Tonghua Grape vs. Beijing Wantai Biological | Tonghua Grape vs. Aluminum Corp of | Tonghua Grape vs. COL Digital Publishing | Tonghua Grape vs. Shaanxi Meineng Clean |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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