Correlation Between Tonghua Grape and INKON Life
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By analyzing existing cross correlation between Tonghua Grape Wine and INKON Life Technology, you can compare the effects of market volatilities on Tonghua Grape and INKON Life 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 INKON Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and INKON Life.
Diversification Opportunities for Tonghua Grape and INKON Life
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tonghua and INKON is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and INKON Life Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INKON Life Technology 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 INKON Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INKON Life Technology has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and INKON Life go up and down completely randomly.
Pair Corralation between Tonghua Grape and INKON Life
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to generate 0.99 times more return on investment than INKON Life. However, Tonghua Grape Wine is 1.01 times less risky than INKON Life. It trades about 0.19 of its potential returns per unit of risk. INKON Life Technology is currently generating about 0.04 per unit of risk. If you would invest 279.00 in Tonghua Grape Wine on September 5, 2024 and sell it today you would earn a total of 27.00 from holding Tonghua Grape Wine or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. INKON Life Technology
Performance |
| Timeline |
| Tonghua Grape Wine |
| INKON Life Technology |
Tonghua Grape and INKON Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and INKON Life
The main advantage of trading using opposite Tonghua Grape and INKON Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, INKON Life 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 INKON Life will offset losses from the drop in INKON Life's long position.| Tonghua Grape vs. Industrial and Commercial | Tonghua Grape vs. Agricultural Bank of | Tonghua Grape vs. China Construction Bank | Tonghua Grape vs. Bank of China |
| INKON Life vs. Industrial and Commercial | INKON Life vs. China Construction Bank | INKON Life vs. Bank of China | INKON Life vs. Agricultural Bank of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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