Correlation Between China Tontine and Tokyu REIT
Can any of the company-specific risk be diversified away by investing in both China Tontine and Tokyu REIT 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 Tokyu REIT 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 Tokyu REIT, you can compare the effects of market volatilities on China Tontine and Tokyu REIT 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 Tokyu REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and Tokyu REIT.
Diversification Opportunities for China Tontine and Tokyu REIT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Tokyu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and Tokyu REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyu REIT 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 Tokyu REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyu REIT has no effect on the direction of China Tontine i.e., China Tontine and Tokyu REIT go up and down completely randomly.
Pair Corralation between China Tontine and Tokyu REIT
Assuming the 90 days horizon China Tontine Wines is expected to generate 4.53 times more return on investment than Tokyu REIT. However, China Tontine is 4.53 times more volatile than Tokyu REIT. It trades about 0.09 of its potential returns per unit of risk. Tokyu REIT is currently generating about -0.13 per unit of risk. If you would invest 1.50 in China Tontine Wines on August 31, 2024 and sell it today you would earn a total of 5.60 from holding China Tontine Wines or generate 373.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 11.84% |
| Values | Daily Returns |
China Tontine Wines vs. Tokyu REIT
Performance |
| Timeline |
| China Tontine Wines |
| Tokyu REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Tontine and Tokyu REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Tontine and Tokyu REIT
The main advantage of trading using opposite China Tontine and Tokyu REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Tontine position performs unexpectedly, Tokyu REIT 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 Tokyu REIT will offset losses from the drop in Tokyu REIT's long position.| China Tontine vs. Diageo PLC ADR | China Tontine vs. Pernod Ricard SA | China Tontine vs. Constellation Brands Class | China Tontine vs. Brown Forman |
| Tokyu REIT vs. Commonwealth Bank of | Tokyu REIT vs. Inter Parfums | Tokyu REIT vs. Arrow Financial | Tokyu REIT vs. PennantPark Floating Rate |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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