Correlation Between Tonghua Grape and Guangzhou Restaurants
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By analyzing existing cross correlation between Tonghua Grape Wine and Guangzhou Restaurants Group, you can compare the effects of market volatilities on Tonghua Grape and Guangzhou Restaurants 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 Guangzhou Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Guangzhou Restaurants.
Diversification Opportunities for Tonghua Grape and Guangzhou Restaurants
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tonghua and Guangzhou is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Guangzhou Restaurants Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Restaurants 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 Guangzhou Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Restaurants has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Guangzhou Restaurants go up and down completely randomly.
Pair Corralation between Tonghua Grape and Guangzhou Restaurants
Assuming the 90 days trading horizon Tonghua Grape Wine is expected to generate 1.35 times more return on investment than Guangzhou Restaurants. However, Tonghua Grape is 1.35 times more volatile than Guangzhou Restaurants Group. It trades about 0.0 of its potential returns per unit of risk. Guangzhou Restaurants Group is currently generating about -0.07 per unit of risk. If you would invest 328.00 in Tonghua Grape Wine on September 4, 2024 and sell it today you would lose (24.00) from holding Tonghua Grape Wine or give up 7.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tonghua Grape Wine vs. Guangzhou Restaurants Group
Performance |
| Timeline |
| Tonghua Grape Wine |
| Guangzhou Restaurants |
Tonghua Grape and Guangzhou Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tonghua Grape and Guangzhou Restaurants
The main advantage of trading using opposite Tonghua Grape and Guangzhou Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Guangzhou Restaurants 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 Guangzhou Restaurants will offset losses from the drop in Guangzhou Restaurants' long position.| Tonghua Grape vs. Chengdu Spaceon Electronics | Tonghua Grape vs. Qingdao Foods Co | Tonghua Grape vs. AVIC Fund Management | Tonghua Grape vs. Jiahe Foods Industry |
| Guangzhou Restaurants vs. New China Life | Guangzhou Restaurants vs. Ming Yang Smart | Guangzhou Restaurants vs. 159681 | Guangzhou Restaurants vs. 159005 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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