Correlation Between CHINA TONTINE and Western Digital

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

Diversification Opportunities for CHINA TONTINE and Western Digital

0.0

Correlation Coefficient

CHINA TONTINE  Western Digital

Pay attention - limited upside

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

Pair Corralation between CHINA TONTINE and Western Digital

If you would invest  7.00  in CHINA TONTINE WINES on December 4, 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.  Western Digital

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

Western Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Western Digital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CHINA TONTINE and Western Digital

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

The idea behind CHINA TONTINE WINES and Western Digital 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.