Correlation Between Insteel Industries and China Tontine
Can any of the company-specific risk be diversified away by investing in both Insteel Industries and China Tontine 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 Insteel Industries and China Tontine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and China Tontine Wines, you can compare the effects of market volatilities on Insteel Industries and China Tontine 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 Insteel Industries with a short position of China Tontine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and China Tontine.
Diversification Opportunities for Insteel Industries and China Tontine
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insteel and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and China Tontine Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Tontine Wines and Insteel Industries 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 Insteel Industries are associated (or correlated) with China Tontine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Tontine Wines has no effect on the direction of Insteel Industries i.e., Insteel Industries and China Tontine go up and down completely randomly.
Pair Corralation between Insteel Industries and China Tontine
If you would invest 2,776 in Insteel Industries on August 29, 2024 and sell it today you would earn a total of 255.00 from holding Insteel Industries or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insteel Industries vs. China Tontine Wines
Performance |
| Timeline |
| Insteel Industries |
| China Tontine Wines |
Insteel Industries and China Tontine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and China Tontine
The main advantage of trading using opposite Insteel Industries and China Tontine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries position performs unexpectedly, China Tontine 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 China Tontine will offset losses from the drop in China Tontine's long position.| Insteel Industries vs. Carpenter Technology | Insteel Industries vs. Haynes International | Insteel Industries vs. Ryerson Holding Corp | Insteel Industries vs. Allegheny Technologies Incorporated |
| China Tontine vs. Aristocrat Group Corp | China Tontine vs. Naked Wines plc | China Tontine vs. Willamette Valley Vineyards | China Tontine vs. Andrew Peller Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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