Correlation Between CHINA TONTINE and Rheinmetall
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and Rheinmetall 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 Rheinmetall 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 Rheinmetall AG, you can compare the effects of market volatilities on CHINA TONTINE and Rheinmetall 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 Rheinmetall. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and Rheinmetall.
Diversification Opportunities for CHINA TONTINE and Rheinmetall
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Rheinmetall is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and Rheinmetall AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rheinmetall AG 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 Rheinmetall. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rheinmetall AG has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and Rheinmetall go up and down completely randomly.
Pair Corralation between CHINA TONTINE and Rheinmetall
If you would invest 70,680 in Rheinmetall AG on December 8, 2024 and sell it today you would earn a total of 37,420 from holding Rheinmetall AG or generate 52.94% 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. Rheinmetall AG
Performance |
| Timeline |
| CHINA TONTINE WINES |
| Rheinmetall AG |
CHINA TONTINE and Rheinmetall Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and Rheinmetall
The main advantage of trading using opposite CHINA TONTINE and Rheinmetall positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, Rheinmetall 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 Rheinmetall will offset losses from the drop in Rheinmetall's long position.| CHINA TONTINE vs. Q2M Managementberatung AG | ||
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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