Correlation Between Tonghua Grape and HeNan Splendor
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By analyzing existing cross correlation between Tonghua Grape Wine and HeNan Splendor Science, you can compare the effects of market volatilities on Tonghua Grape and HeNan Splendor 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 HeNan Splendor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and HeNan Splendor.
Diversification Opportunities for Tonghua Grape and HeNan Splendor
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tonghua and HeNan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and HeNan Splendor Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HeNan Splendor Science 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 HeNan Splendor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HeNan Splendor Science has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and HeNan Splendor go up and down completely randomly.
Pair Corralation between Tonghua Grape and HeNan Splendor
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the HeNan Splendor. But the stock apears to be less risky and, when comparing its historical volatility, Tonghua Grape Wine is 1.25 times less risky than HeNan Splendor. The stock trades about -0.04 of its potential returns per unit of risk. The HeNan Splendor Science is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 883.00 in HeNan Splendor Science on November 7, 2024 and sell it today you would earn a total of 165.00 from holding HeNan Splendor Science or generate 18.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. HeNan Splendor Science
Performance |
| Timeline |
| Tonghua Grape Wine |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HeNan Splendor Science |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Tonghua Grape and HeNan Splendor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and HeNan Splendor
The main advantage of trading using opposite Tonghua Grape and HeNan Splendor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, HeNan Splendor 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 HeNan Splendor will offset losses from the drop in HeNan Splendor's long position.| Tonghua Grape vs. Zhejiang Zanyu Technology | Tonghua Grape vs. Shanghai SK Automation | Tonghua Grape vs. ShenZhen YUTO Packaging | Tonghua Grape vs. Lao Feng Xiang |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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