Correlation Between CHINA TONTINE and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on CHINA TONTINE and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and Strategic Investments.
Diversification Opportunities for CHINA TONTINE and Strategic Investments
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Strategic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and Strategic Investments go up and down completely randomly.
Pair Corralation between CHINA TONTINE and Strategic Investments
If you would invest 14.00 in Strategic Investments AS on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Strategic Investments AS or generate 0.0% 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. Strategic Investments AS
Performance |
| Timeline |
| CHINA TONTINE WINES |
| Strategic Investments |
CHINA TONTINE and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and Strategic Investments
The main advantage of trading using opposite CHINA TONTINE and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| CHINA TONTINE vs. SPORTING | CHINA TONTINE vs. X FAB Silicon Foundries | CHINA TONTINE vs. Transport International Holdings | CHINA TONTINE vs. MACOM Technology Solutions |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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