Correlation Between CHINA TONTINE and AECOM TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY, you can compare the effects of market volatilities on CHINA TONTINE and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and AECOM TECHNOLOGY.
Diversification Opportunities for CHINA TONTINE and AECOM TECHNOLOGY
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and AECOM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and AECOM TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM TECHNOLOGY has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and AECOM TECHNOLOGY go up and down completely randomly.
Pair Corralation between CHINA TONTINE and AECOM TECHNOLOGY
Assuming the 90 days trading horizon CHINA TONTINE WINES is expected to generate 28.65 times more return on investment than AECOM TECHNOLOGY. However, CHINA TONTINE is 28.65 times more volatile than AECOM TECHNOLOGY. It trades about 0.04 of its potential returns per unit of risk. AECOM TECHNOLOGY is currently generating about 0.06 per unit of risk. If you would invest 0.70 in CHINA TONTINE WINES on September 3, 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 | 99.8% |
| Values | Daily Returns |
CHINA TONTINE WINES vs. AECOM TECHNOLOGY
Performance |
| Timeline |
| CHINA TONTINE WINES |
| AECOM TECHNOLOGY |
CHINA TONTINE and AECOM TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and AECOM TECHNOLOGY
The main advantage of trading using opposite CHINA TONTINE and AECOM TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, AECOM TECHNOLOGY 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 AECOM TECHNOLOGY will offset losses from the drop in AECOM TECHNOLOGY's long position.| CHINA TONTINE vs. Superior Plus Corp | CHINA TONTINE vs. NMI Holdings | CHINA TONTINE vs. Origin Agritech | CHINA TONTINE vs. SIVERS SEMICONDUCTORS AB |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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