Correlation Between China Tontine and NESNVX

Can any of the company-specific risk be diversified away by investing in both China Tontine and NESNVX 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 NESNVX 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 NESNVX 5 14 MAR 28, you can compare the effects of market volatilities on China Tontine and NESNVX 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 NESNVX. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and NESNVX.

Diversification Opportunities for China Tontine and NESNVX

0.0

Correlation Coefficient

China Tontine  NESNVX

Pay attention - limited upside

The 3 months correlation between China and NESNVX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and NESNVX 5 14 MAR 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESNVX 5 14 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 NESNVX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESNVX 5 14 has no effect on the direction of China Tontine i.e., China Tontine and NESNVX go up and down completely randomly.

Pair Corralation between China Tontine and NESNVX

Assuming the 90 days horizon China Tontine Wines is expected to generate 161.03 times more return on investment than NESNVX. However, China Tontine is 161.03 times more volatile than NESNVX 5 14 MAR 28. It trades about 0.09 of its potential returns per unit of risk. NESNVX 5 14 MAR 28 is currently generating about 0.0 per unit of risk. If you would invest  1.50  in China Tontine Wines on September 21, 2024 and sell it today you would earn a total of  5.60  from holding China Tontine Wines or generate 373.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	50.2%
Values	Daily Returns

China Tontine Wines  vs.  NESNVX 5 14 MAR 28

China Tontine Wines

Risk-Adjusted Performance

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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.

NESNVX 5 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 5 14 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX 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 NESNVX

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

The idea behind China Tontine Wines and NESNVX 5 14 MAR 28 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.