Correlation Between ITALIAN WINE and CHINA TONTINE
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and CHINA TONTINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and CHINA TONTINE WINES, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of CHINA TONTINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and CHINA TONTINE.
Diversification Opportunities for ITALIAN WINE and CHINA TONTINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ITALIAN and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS 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 ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and CHINA TONTINE go up and down completely randomly.
Pair Corralation between ITALIAN WINE and CHINA TONTINE
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to under-perform the CHINA TONTINE. But the stock apears to be less risky and, when comparing its historical volatility, ITALIAN WINE BRANDS is 20.16 times less risky than CHINA TONTINE. The stock trades about -0.01 of its potential returns per unit of risk. The CHINA TONTINE WINES is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.70 in CHINA TONTINE WINES on August 28, 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 | 99.79% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. CHINA TONTINE WINES
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| CHINA TONTINE WINES |
ITALIAN WINE and CHINA TONTINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and CHINA TONTINE
The main advantage of trading using opposite ITALIAN WINE and CHINA TONTINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.| ITALIAN WINE vs. Merit Medical Systems | ITALIAN WINE vs. GOODYEAR T RUBBER | ITALIAN WINE vs. SCANDMEDICAL SOLDK 040 | ITALIAN WINE vs. Apollo Medical Holdings |
| CHINA TONTINE vs. Superior Plus Corp | CHINA TONTINE vs. NMI Holdings | CHINA TONTINE vs. Origin Agritech | CHINA TONTINE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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