Correlation Between CHINA TONTINE and DOCDATA

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

Diversification Opportunities for CHINA TONTINE and DOCDATA

0.0

Correlation Coefficient

CHINA TONTINE  DOCDATA

Pay attention - limited upside

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

Pair Corralation between CHINA TONTINE and DOCDATA

If you would invest  7.00  in CHINA TONTINE WINES on September 5, 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	100.0%
Values	Daily Returns

CHINA TONTINE WINES  vs.  DOCDATA

CHINA TONTINE WINES

Risk-Adjusted Performance

0 of 100

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

DOCDATA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DOCDATA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CHINA TONTINE and DOCDATA

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

The idea behind CHINA TONTINE WINES and DOCDATA 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.