Correlation Between China Tontine and SUMILF

Can any of the company-specific risk be diversified away by investing in both China Tontine and SUMILF 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 SUMILF 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 SUMILF 3375 15 APR 81, you can compare the effects of market volatilities on China Tontine and SUMILF 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 SUMILF. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and SUMILF.

Diversification Opportunities for China Tontine and SUMILF

0.0

Correlation Coefficient

China Tontine  SUMILF

Pay attention - limited upside

The 3 months correlation between China and SUMILF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and SUMILF 3375 15 APR 81 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMILF 3375 15 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 SUMILF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMILF 3375 15 has no effect on the direction of China Tontine i.e., China Tontine and SUMILF go up and down completely randomly.

Pair Corralation between China Tontine and SUMILF

If you would invest  8,803  in SUMILF 3375 15 APR 81 on December 2, 2024 and sell it today you would earn a total of  72.00  from holding SUMILF 3375 15 APR 81 or generate 0.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	7.69%
Values	Daily Returns

China Tontine Wines  vs.  SUMILF 3375 15 APR 81

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.

SUMILF 3375 15

Risk-Adjusted Performance

Very Strong

Over the last 90 days SUMILF 3375 15 APR 81 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat unfluctuating basic indicators, SUMILF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with China Tontine and SUMILF

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

The idea behind China Tontine Wines and SUMILF 3375 15 APR 81 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.