Correlation Between China Tontine and BAXALTA

Can any of the company-specific risk be diversified away by investing in both China Tontine and BAXALTA 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 BAXALTA 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 BAXALTA INC 4, you can compare the effects of market volatilities on China Tontine and BAXALTA 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 BAXALTA. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and BAXALTA.

Diversification Opportunities for China Tontine and BAXALTA

0.0

Correlation Coefficient

China Tontine  BAXALTA

Pay attention - limited upside

The 3 months correlation between China and BAXALTA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and BAXALTA INC 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAXALTA INC 4 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 BAXALTA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAXALTA INC 4 has no effect on the direction of China Tontine i.e., China Tontine and BAXALTA go up and down completely randomly.

Pair Corralation between China Tontine and BAXALTA

If you would invest  7.10  in China Tontine Wines on December 23, 2024 and sell it today you would earn a total of  0.00  from holding China Tontine Wines or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	92.31%
Values	Daily Returns

China Tontine Wines  vs.  BAXALTA INC 4

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

BAXALTA INC 4

Risk-Adjusted Performance

Very Weak

Over the last 90 days BAXALTA INC 4 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAXALTA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with China Tontine and BAXALTA

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

The idea behind China Tontine Wines and BAXALTA INC 4 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.