Correlation Between Wintao Communications and Tonghua Grape
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By analyzing existing cross correlation between Wintao Communications Co and Tonghua Grape Wine, you can compare the effects of market volatilities on Wintao Communications 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 Wintao Communications with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintao Communications and Tonghua Grape.
Diversification Opportunities for Wintao Communications and Tonghua Grape
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wintao and Tonghua is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Wintao Communications Co 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 Wintao Communications 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 Wintao Communications Co 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 Wintao Communications i.e., Wintao Communications and Tonghua Grape go up and down completely randomly.
Pair Corralation between Wintao Communications and Tonghua Grape
Assuming the 90 days trading horizon Wintao Communications Co is expected to under-perform the Tonghua Grape. In addition to that, Wintao Communications is 1.18 times more volatile than Tonghua Grape Wine. It trades about -0.05 of its total potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.1 per unit of volatility. If you would invest 280.00 in Tonghua Grape Wine on September 27, 2024 and sell it today you would earn a total of 14.00 from holding Tonghua Grape Wine or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintao Communications Co vs. Tonghua Grape Wine
Performance |
| Timeline |
| Wintao Communications |
| Tonghua Grape Wine |
Wintao Communications and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintao Communications and Tonghua Grape
The main advantage of trading using opposite Wintao Communications and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintao Communications 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.The idea behind Wintao Communications Co and Tonghua Grape Wine 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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