Correlation Between China Health and Nascent Wine
Can any of the company-specific risk be diversified away by investing in both China Health and Nascent Wine 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 Health and Nascent Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Health Industries and Nascent Wine, you can compare the effects of market volatilities on China Health and Nascent Wine 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 Health with a short position of Nascent Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Health and Nascent Wine.
Diversification Opportunities for China Health and Nascent Wine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Nascent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Health Industries and Nascent Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nascent Wine and China Health 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 Health Industries are associated (or correlated) with Nascent Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nascent Wine has no effect on the direction of China Health i.e., China Health and Nascent Wine go up and down completely randomly.
Pair Corralation between China Health and Nascent Wine
If you would invest 0.01 in Nascent Wine on November 3, 2024 and sell it today you would lose 0.00 from holding Nascent Wine or give up 0.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
China Health Industries vs. Nascent Wine
Performance |
| Timeline |
| China Health Industries |
| Nascent Wine |
China Health and Nascent Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Health and Nascent Wine
The main advantage of trading using opposite China Health and Nascent Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Health position performs unexpectedly, Nascent Wine 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 Nascent Wine will offset losses from the drop in Nascent Wine's long position.| China Health vs. Flutter Entertainment plc | China Health vs. Qorvo Inc | China Health vs. ASML Holding NV | China Health vs. Mediag3 |
| Nascent Wine vs. NiSource | Nascent Wine vs. CenterPoint Energy | Nascent Wine vs. Summit Midstream | Nascent Wine vs. Sphere Entertainment Co |
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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