Correlation Between CHINA TONTINE and Major Drilling
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and Major Drilling 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 Major Drilling 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 Major Drilling Group, you can compare the effects of market volatilities on CHINA TONTINE and Major Drilling 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 Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and Major Drilling.
Diversification Opportunities for CHINA TONTINE and Major Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group 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 Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and Major Drilling go up and down completely randomly.
Pair Corralation between CHINA TONTINE and Major Drilling
Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 17.99 times more return on investment than Major Drilling. However, CHINA TONTINE is 17.99 times more volatile than Major Drilling Group. It trades about 0.04 of its potential returns per unit of risk. Major Drilling Group is currently generating about -0.01 per unit of risk. If you would invest 0.70 in CHINA TONTINE WINES on October 27, 2024 and sell it today you would earn a total of 6.30 from holding CHINA TONTINE WINES or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA TONTINE WINES vs. Major Drilling Group
Performance |
| Timeline |
| CHINA TONTINE WINES |
| Major Drilling Group |
CHINA TONTINE and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and Major Drilling
The main advantage of trading using opposite CHINA TONTINE and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| CHINA TONTINE vs. MidCap Financial Investment | CHINA TONTINE vs. BJs Restaurants | CHINA TONTINE vs. GREENX METALS LTD | CHINA TONTINE vs. PennantPark Investment |
| Major Drilling vs. Mobilezone Holding AG | Major Drilling vs. Martin Marietta Materials | Major Drilling vs. Applied Materials | Major Drilling vs. GOODYEAR T RUBBER |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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