Correlation Between Tonghua Grape and Dongguan Tarry
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By analyzing existing cross correlation between Tonghua Grape Wine and Dongguan Tarry Electronics, you can compare the effects of market volatilities on Tonghua Grape and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Dongguan Tarry.
Diversification Opportunities for Tonghua Grape and Dongguan Tarry
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tonghua and Dongguan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Dongguan Tarry go up and down completely randomly.
Pair Corralation between Tonghua Grape and Dongguan Tarry
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to under-perform the Dongguan Tarry. But the stock apears to be less risky and, when comparing its historical volatility, Tonghua Grape Wine is 1.36 times less risky than Dongguan Tarry. The stock trades about -0.03 of its potential returns per unit of risk. The Dongguan Tarry Electronics is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,224 in Dongguan Tarry Electronics on November 2, 2024 and sell it today you would earn a total of 1,679 from holding Dongguan Tarry Electronics or generate 32.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Dongguan Tarry Electronics
Performance |
| Timeline |
| Tonghua Grape Wine |
| Dongguan Tarry Elect |
Tonghua Grape and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Dongguan Tarry
The main advantage of trading using opposite Tonghua Grape and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| Tonghua Grape vs. Gan Yuan Foods | Tonghua Grape vs. Jiahe Foods Industry | Tonghua Grape vs. Shanghai Ziyan Foods | Tonghua Grape vs. Chison Medical Technologies |
| Dongguan Tarry vs. Shenzhen Bioeasy Biotechnology | Dongguan Tarry vs. Liaoning Chengda Biotechnology | Dongguan Tarry vs. Zhejiang Qianjiang Motorcycle | Dongguan Tarry vs. Fujian Wanchen Biotechnology |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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