Correlation Between Tonghua Grape and Inner Mongolia
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By analyzing existing cross correlation between Tonghua Grape Wine and Inner Mongolia Dazhong, you can compare the effects of market volatilities on Tonghua Grape and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Inner Mongolia.
Diversification Opportunities for Tonghua Grape and Inner Mongolia
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tonghua and Inner is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Inner Mongolia Dazhong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Dazhong 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Dazhong has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Inner Mongolia go up and down completely randomly.
Pair Corralation between Tonghua Grape and Inner Mongolia
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the Inner Mongolia. In addition to that, Tonghua Grape is 1.87 times more volatile than Inner Mongolia Dazhong. It trades about -0.31 of its total potential returns per unit of risk. Inner Mongolia Dazhong is currently generating about -0.25 per unit of volatility. If you would invest 899.00 in Inner Mongolia Dazhong on October 23, 2024 and sell it today you would lose (59.00) from holding Inner Mongolia Dazhong or give up 6.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Inner Mongolia Dazhong
Performance |
| Timeline |
| Tonghua Grape Wine |
| Inner Mongolia Dazhong |
Tonghua Grape and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Inner Mongolia
The main advantage of trading using opposite Tonghua Grape and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| Tonghua Grape vs. Heilongjiang Transport Development | Tonghua Grape vs. Sichuan Fulin Transportation | Tonghua Grape vs. Nanjing OLO Home | Tonghua Grape vs. Gansu Huangtai Wine marketing |
| Inner Mongolia vs. Luolai Home Textile | Inner Mongolia vs. Xiwang Foodstuffs Co | Inner Mongolia vs. Xiamen Goldenhome Co | Inner Mongolia vs. Tonghua Grape Wine |
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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