Correlation Between Tortoise Energy and China Fund

Can any of the company-specific risk be diversified away by investing in both Tortoise Energy and China Fund 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 Tortoise Energy and China Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tortoise Energy Independence and China Fund, you can compare the effects of market volatilities on Tortoise Energy and China Fund 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 Tortoise Energy with a short position of China Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tortoise Energy and China Fund.

Diversification Opportunities for Tortoise Energy and China Fund

0.0

Correlation Coefficient

Tortoise Energy  China Fund

Pay attention - limited upside

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

Pair Corralation between Tortoise Energy and China Fund

If you would invest  1,197  in China Fund on December 20, 2024 and sell it today you would earn a total of  177.00  from holding China Fund or generate 14.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tortoise Energy Independence  vs.  China Fund

Tortoise Energy Inde

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tortoise Energy Independence has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable fundamental indicators, Tortoise Energy is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

China Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very fragile technical indicators, China Fund displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tortoise Energy and China Fund

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

The idea behind Tortoise Energy Independence and China Fund 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.