Correlation Between Allwin Telecommunicatio and Inner Mongolia

Can any of the company-specific risk be diversified away by investing in both Allwin Telecommunicatio and Inner Mongolia 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 Allwin Telecommunicatio and Inner Mongolia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allwin Telecommunication Co and Inner Mongolia Junzheng, you can compare the effects of market volatilities on Allwin Telecommunicatio and Inner Mongolia 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 Allwin Telecommunicatio with a short position of Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allwin Telecommunicatio and Inner Mongolia.

Diversification Opportunities for Allwin Telecommunicatio and Inner Mongolia

0.49

Correlation Coefficient

Allwin Telecommunicatio  Inner Mongolia

Very weak diversification

The 3 months correlation between Allwin and Inner is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Allwin Telecommunication Co and Inner Mongolia Junzheng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Junzheng and Allwin Telecommunicatio 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 Allwin Telecommunication Co are associated (or correlated) with Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Junzheng has no effect on the direction of Allwin Telecommunicatio i.e., Allwin Telecommunicatio and Inner Mongolia go up and down completely randomly.

Pair Corralation between Allwin Telecommunicatio and Inner Mongolia

Assuming the 90 days trading horizon Allwin Telecommunication Co is expected to under-perform the Inner Mongolia. In addition to that, Allwin Telecommunicatio is 1.01 times more volatile than Inner Mongolia Junzheng. It trades about -0.19 of its total potential returns per unit of risk. Inner Mongolia Junzheng is currently generating about -0.07 per unit of volatility. If you would invest  578.00  in Inner Mongolia Junzheng on October 10, 2024 and sell it today you would lose (58.00) from holding Inner Mongolia Junzheng or give up 10.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Allwin Telecommunication Co  vs.  Inner Mongolia Junzheng

Allwin Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allwin Telecommunication Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Allwin Telecommunicatio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Inner Mongolia Junzheng

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inner Mongolia Junzheng are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inner Mongolia sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allwin Telecommunicatio and Inner Mongolia

The main advantage of trading using opposite Allwin Telecommunicatio and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allwin Telecommunicatio position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.

The idea behind Allwin Telecommunication Co and Inner Mongolia Junzheng 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.

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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 Stocks Directory module to find actively traded stocks across global markets.