Correlation Between CHINA TONTINE and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on CHINA TONTINE and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and AIR PRODCHEMICALS.
Diversification Opportunities for CHINA TONTINE and AIR PRODCHEMICALS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and AIR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between CHINA TONTINE and AIR PRODCHEMICALS
Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 25.33 times more return on investment than AIR PRODCHEMICALS. However, CHINA TONTINE is 25.33 times more volatile than AIR PRODCHEMICALS. It trades about 0.05 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.03 per unit of risk. If you would invest 0.70 in CHINA TONTINE WINES on November 28, 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. AIR PRODCHEMICALS
Performance |
| Timeline |
| CHINA TONTINE WINES |
| AIR PRODCHEMICALS |
CHINA TONTINE and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and AIR PRODCHEMICALS
The main advantage of trading using opposite CHINA TONTINE and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| CHINA TONTINE vs. Yanzhou Coal Mining | CHINA TONTINE vs. Kaufman Broad SA | CHINA TONTINE vs. Broadcom | CHINA TONTINE vs. ANGLO ASIAN MINING |
| AIR PRODCHEMICALS vs. BII Railway Transportation | AIR PRODCHEMICALS vs. DICKS Sporting Goods | AIR PRODCHEMICALS vs. Meli Hotels International | AIR PRODCHEMICALS vs. MELIA HOTELS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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