Correlation Between China Satellite and Tonghua Grape
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By analyzing existing cross correlation between China Satellite Communications and Tonghua Grape Wine, you can compare the effects of market volatilities on China Satellite and Tonghua Grape 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 Satellite with a short position of Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Satellite and Tonghua Grape.
Diversification Opportunities for China Satellite and Tonghua Grape
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Tonghua is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding China Satellite Communications and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine and China Satellite 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 Satellite Communications are associated (or correlated) with Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of China Satellite i.e., China Satellite and Tonghua Grape go up and down completely randomly.
Pair Corralation between China Satellite and Tonghua Grape
Assuming the 90 days trading horizon China Satellite is expected to generate 1.29 times less return on investment than Tonghua Grape. In addition to that, China Satellite is 1.52 times more volatile than Tonghua Grape Wine. It trades about 0.07 of its total potential returns per unit of risk. Tonghua Grape Wine is currently generating about 0.14 per unit of volatility. If you would invest 283.00 in Tonghua Grape Wine on September 25, 2024 and sell it today you would earn a total of 20.00 from holding Tonghua Grape Wine or generate 7.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
China Satellite Communications vs. Tonghua Grape Wine
Performance |
Timeline |
China Satellite Comm |
Tonghua Grape Wine |
China Satellite and Tonghua Grape Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with China Satellite and Tonghua Grape
The main advantage of trading using opposite China Satellite and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Satellite position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.China Satellite vs. Jiangsu GDK Biotechnology | China Satellite vs. Guangdong Shenglu Telecommunication | China Satellite vs. Guangxi Wuzhou Communications | China Satellite vs. Changchun BCHT Biotechnology |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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