Correlation Between Tonghua Grape and Wintao Communications
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By analyzing existing cross correlation between Tonghua Grape Wine and Wintao Communications Co, you can compare the effects of market volatilities on Tonghua Grape and Wintao Communications 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 Tonghua Grape with a short position of Wintao Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tonghua Grape and Wintao Communications.
Diversification Opportunities for Tonghua Grape and Wintao Communications
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tonghua and Wintao is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Tonghua Grape Wine and Wintao Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintao Communications and Tonghua Grape 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 Tonghua Grape Wine are associated (or correlated) with Wintao Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintao Communications has no effect on the direction of Tonghua Grape i.e., Tonghua Grape and Wintao Communications go up and down completely randomly.
Pair Corralation between Tonghua Grape and Wintao Communications
Assuming the 90 days trading horizon Tonghua Grape is expected to generate 1.22 times less return on investment than Wintao Communications. But when comparing it to its historical volatility, Tonghua Grape Wine is 1.66 times less risky than Wintao Communications. It trades about 0.13 of its potential returns per unit of risk. Wintao Communications Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,924 in Wintao Communications Co on September 25, 2024 and sell it today you would earn a total of 397.00 from holding Wintao Communications Co or generate 20.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tonghua Grape Wine vs. Wintao Communications Co
Performance |
Timeline |
Tonghua Grape Wine |
Wintao Communications |
Tonghua Grape and Wintao Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tonghua Grape and Wintao Communications
The main advantage of trading using opposite Tonghua Grape and Wintao Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tonghua Grape position performs unexpectedly, Wintao Communications 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 Wintao Communications will offset losses from the drop in Wintao Communications' long position.Tonghua Grape vs. PetroChina Co Ltd | Tonghua Grape vs. China Mobile Limited | Tonghua Grape vs. CNOOC Limited | Tonghua Grape vs. Ping An Insurance |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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