Correlation Between Tonghua Grape and Chengdu Xingrong
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By analyzing existing cross correlation between Tonghua Grape Wine and Chengdu Xingrong Investment, you can compare the effects of market volatilities on Tonghua Grape and Chengdu Xingrong 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 Tonghua Grape with a short position of Chengdu Xingrong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Chengdu Xingrong.
Diversification Opportunities for Tonghua Grape and Chengdu Xingrong
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tonghua and Chengdu is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Chengdu Xingrong Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu Xingrong Inv and Tonghua Grape 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 Tonghua Grape Wine are associated (or correlated) with Chengdu Xingrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu Xingrong Inv has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Chengdu Xingrong go up and down completely randomly.
Pair Corralation between Tonghua Grape and Chengdu Xingrong
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the Chengdu Xingrong. In addition to that, Tonghua Grape is 1.86 times more volatile than Chengdu Xingrong Investment. It trades about -0.27 of its total potential returns per unit of risk. Chengdu Xingrong Investment is currently generating about -0.03 per unit of volatility. If you would invest 721.00 in Chengdu Xingrong Investment on October 17, 2024 and sell it today you would lose (9.00) from holding Chengdu Xingrong Investment or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Chengdu Xingrong Investment
Performance |
| Timeline |
| Tonghua Grape Wine |
| Chengdu Xingrong Inv |
Tonghua Grape and Chengdu Xingrong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Chengdu Xingrong
The main advantage of trading using opposite Tonghua Grape and Chengdu Xingrong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Chengdu Xingrong 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 Chengdu Xingrong will offset losses from the drop in Chengdu Xingrong's long position.| Tonghua Grape vs. Chahua Modern Housewares | Tonghua Grape vs. East Money Information | Tonghua Grape vs. Shenzhen SDG Information | Tonghua Grape vs. Anhui Jianghuai Automobile |
| Chengdu Xingrong vs. Changjiang Jinggong Steel | Chengdu Xingrong vs. Hangzhou Guotai Environmental | Chengdu Xingrong vs. Tonghua Grape Wine | Chengdu Xingrong vs. Yindu Kitchen Equipment |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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