Correlation Between CHINA TONTINE and Zhongsheng Group

Can any of the company-specific risk be diversified away by investing in both CHINA TONTINE and Zhongsheng Group 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 Zhongsheng Group 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 Zhongsheng Group Holdings, you can compare the effects of market volatilities on CHINA TONTINE and Zhongsheng Group 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 Zhongsheng Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA TONTINE and Zhongsheng Group.

Diversification Opportunities for CHINA TONTINE and Zhongsheng Group

0.0

Correlation Coefficient

CHINA TONTINE  Zhongsheng Group

Pay attention - limited upside

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

Pair Corralation between CHINA TONTINE and Zhongsheng Group

If you would invest  7.00  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	98.36%
Values	Daily Returns

CHINA TONTINE WINES  vs.  Zhongsheng Group Holdings

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. In spite of comparatively stable technical and fundamental indicators, CHINA TONTINE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Zhongsheng Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zhongsheng Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with CHINA TONTINE and Zhongsheng Group

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

The idea behind CHINA TONTINE WINES and Zhongsheng Group Holdings 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.