Correlation Between China Tontine and New World
Can any of the company-specific risk be diversified away by investing in both China Tontine and New World 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 China Tontine and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Tontine Wines and New World Development, you can compare the effects of market volatilities on China Tontine and New World 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 China Tontine with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and New World.
Diversification Opportunities for China Tontine and New World
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and New World Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Development and China Tontine 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 China Tontine Wines are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Development has no effect on the direction of China Tontine i.e., China Tontine and New World go up and down completely randomly.
Pair Corralation between China Tontine and New World
If you would invest 92.00 in New World Development on September 12, 2024 and sell it today you would earn a total of 0.00 from holding New World Development or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Tontine Wines vs. New World Development
Performance |
| Timeline |
| China Tontine Wines |
| New World Development |
China Tontine and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Tontine and New World
The main advantage of trading using opposite China Tontine and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Tontine position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| China Tontine vs. Andrew Peller Limited | China Tontine vs. Aristocrat Group Corp | China Tontine vs. Iconic Brands | China Tontine vs. Naked Wines plc |
| New World vs. Constellation Brands Class | New World vs. China Tontine Wines | New World vs. Diamond Estates Wines | New World vs. SNDL Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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