Correlation Between China Vanke and Digital China
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By analyzing existing cross correlation between China Vanke Co and Digital China Information, you can compare the effects of market volatilities on China Vanke and Digital China 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 Vanke with a short position of Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and Digital China.
Diversification Opportunities for China Vanke and Digital China
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Digital is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information and China Vanke 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 Vanke Co are associated (or correlated) with Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of China Vanke i.e., China Vanke and Digital China go up and down completely randomly.
Pair Corralation between China Vanke and Digital China
Assuming the 90 days trading horizon China Vanke Co is expected to under-perform the Digital China. But the stock apears to be less risky and, when comparing its historical volatility, China Vanke Co is 1.2 times less risky than Digital China. The stock trades about -0.06 of its potential returns per unit of risk. The Digital China Information is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,219 in Digital China Information on November 5, 2024 and sell it today you would lose (128.00) from holding Digital China Information or give up 10.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Vanke Co vs. Digital China Information
Performance |
| Timeline |
| China Vanke |
| Digital China Information |
China Vanke and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Vanke and Digital China
The main advantage of trading using opposite China Vanke and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| China Vanke vs. Harson Trading China | China Vanke vs. Tieling Newcity Investment | China Vanke vs. Simei Media Co | China Vanke vs. Zhongrun Resources Investment |
| Digital China vs. GuoChuang Software Co | Digital China vs. Guangdong Jinma Entertainment | Digital China vs. Omnijoi Media Corp | Digital China vs. Simei Media Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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