Correlation Between Aristocrat Group and China Tontine
Can any of the company-specific risk be diversified away by investing in both Aristocrat Group and China Tontine at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aristocrat Group and China Tontine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Group Corp and China Tontine Wines, you can compare the effects of market volatilities on Aristocrat Group and China Tontine 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 Aristocrat Group with a short position of China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Group and China Tontine.
Diversification Opportunities for Aristocrat Group and China Tontine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aristocrat and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Group Corp and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines and Aristocrat Group 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 Aristocrat Group Corp are associated (or correlated) with China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of Aristocrat Group i.e., Aristocrat Group and China Tontine go up and down completely randomly.
Pair Corralation between Aristocrat Group and China Tontine
Given the investment horizon of 90 days Aristocrat Group Corp is expected to generate 1.2 times more return on investment than China Tontine. However, Aristocrat Group is 1.2 times more volatile than China Tontine Wines. It trades about 0.08 of its potential returns per unit of risk. China Tontine Wines is currently generating about 0.07 per unit of risk. If you would invest 1.70 in Aristocrat Group Corp on September 1, 2024 and sell it today you would lose (0.99) from holding Aristocrat Group Corp or give up 58.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aristocrat Group Corp vs. China Tontine Wines
Performance |
| Timeline |
| Aristocrat Group Corp |
| China Tontine Wines |
Aristocrat Group and China Tontine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Group and China Tontine
The main advantage of trading using opposite Aristocrat Group and China Tontine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Group position performs unexpectedly, China Tontine 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 China Tontine will offset losses from the drop in China Tontine's long position.| Aristocrat Group vs. Iconic Brands | Aristocrat Group vs. Becle SA de | Aristocrat Group vs. Naked Wines plc | Aristocrat Group vs. Willamette Valley Vineyards |
| China Tontine vs. BCE Inc | China Tontine vs. Fomento Economico Mexicano | China Tontine vs. Western Sierra Mining | China Tontine vs. Anheuser Busch Inbev |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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