Correlation Between China Tontine and SPENN Technology

Can any of the company-specific risk be diversified away by investing in both China Tontine and SPENN Technology 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 China Tontine and SPENN Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Tontine Wines and SPENN Technology AS, you can compare the effects of market volatilities on China Tontine and SPENN Technology 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 Tontine with a short position of SPENN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and SPENN Technology.

Diversification Opportunities for China Tontine and SPENN Technology

-1.0

Correlation Coefficient

China Tontine  SPENN Technology

Pay attention - limited upside

The 3 months correlation between China and SPENN is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology and China Tontine 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 Tontine Wines are associated (or correlated) with SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of China Tontine i.e., China Tontine and SPENN Technology go up and down completely randomly.

Pair Corralation between China Tontine and SPENN Technology

If you would invest  61.00  in SPENN Technology AS on December 28, 2024 and sell it today you would earn a total of  0.00  from holding SPENN Technology AS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	52.38%
Values	Daily Returns

China Tontine Wines  vs.  SPENN Technology AS

China Tontine Wines

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Tontine Wines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, China Tontine is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

SPENN Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPENN Technology AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SPENN Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with China Tontine and SPENN Technology

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

The idea behind China Tontine Wines and SPENN Technology AS 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.

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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.