Correlation Between China Tontine and 04685A2N0

Can any of the company-specific risk be diversified away by investing in both China Tontine and 04685A2N0 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 04685A2N0 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 US04685A2N06, you can compare the effects of market volatilities on China Tontine and 04685A2N0 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 04685A2N0. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and 04685A2N0.

Diversification Opportunities for China Tontine and 04685A2N0

0.0

Correlation Coefficient

China Tontine  04685A2N0

Pay attention - limited upside

The 3 months correlation between China and 04685A2N0 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and US04685A2N06 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US04685A2N06 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 04685A2N0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US04685A2N06 has no effect on the direction of China Tontine i.e., China Tontine and 04685A2N0 go up and down completely randomly.

Pair Corralation between China Tontine and 04685A2N0

If you would invest  9,848  in US04685A2N06 on October 24, 2024 and sell it today you would earn a total of  57.00  from holding US04685A2N06 or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	34.38%
Values	Daily Returns

China Tontine Wines  vs.  US04685A2N06

China Tontine Wines

Risk-Adjusted Performance

0 of 100

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

US04685A2N06

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in US04685A2N06 are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 04685A2N0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with China Tontine and 04685A2N0

The main advantage of trading using opposite China Tontine and 04685A2N0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Tontine position performs unexpectedly, 04685A2N0 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 04685A2N0 will offset losses from the drop in 04685A2N0's long position.

The idea behind China Tontine Wines and US04685A2N06 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.