Correlation Between China Tontine and PROVIDENCE

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

Diversification Opportunities for China Tontine and PROVIDENCE

0.0

Correlation Coefficient

China Tontine  PROVIDENCE

Pay attention - limited upside

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

Pair Corralation between China Tontine and PROVIDENCE

If you would invest  7,584  in PROVIDENCE HEALTH SVCS on December 25, 2024 and sell it today you would earn a total of  89.00  from holding PROVIDENCE HEALTH SVCS or generate 1.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	7.94%
Values	Daily Returns

China Tontine Wines  vs.  PROVIDENCE HEALTH SVCS

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

PROVIDENCE HEALTH SVCS

Risk-Adjusted Performance

Strong

Over the last 90 days PROVIDENCE HEALTH SVCS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unsteady basic indicators, PROVIDENCE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Tontine and PROVIDENCE

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

The idea behind China Tontine Wines and PROVIDENCE HEALTH SVCS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.