Correlation Between CHINA TONTINE and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on CHINA TONTINE and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and SPARTAN STORES.
Diversification Opportunities for CHINA TONTINE and SPARTAN STORES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and SPARTAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of CHINA TONTINE i.e., CHINA TONTINE and SPARTAN STORES go up and down completely randomly.
Pair Corralation between CHINA TONTINE and SPARTAN STORES
If you would invest 7.00 in CHINA TONTINE WINES on August 30, 2024 and sell it today you would earn a total of 0.00 from holding CHINA TONTINE WINES 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. SPARTAN STORES
Performance |
| Timeline |
| CHINA TONTINE WINES |
| SPARTAN STORES |
CHINA TONTINE and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA TONTINE and SPARTAN STORES
The main advantage of trading using opposite CHINA TONTINE and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.The idea behind CHINA TONTINE WINES and SPARTAN STORES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Superior Plus Corp | SPARTAN STORES vs. SIVERS SEMICONDUCTORS AB |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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