Correlation Between China Vanke and Shandong Homey
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By analyzing existing cross correlation between China Vanke Co and Shandong Homey Aquatic, you can compare the effects of market volatilities on China Vanke and Shandong Homey 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 Shandong Homey. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and Shandong Homey.
Diversification Opportunities for China Vanke and Shandong Homey
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shandong is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and Shandong Homey Aquatic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Homey Aquatic 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 Shandong Homey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Homey Aquatic has no effect on the direction of China Vanke i.e., China Vanke and Shandong Homey go up and down completely randomly.
Pair Corralation between China Vanke and Shandong Homey
Assuming the 90 days trading horizon China Vanke Co is expected to under-perform the Shandong Homey. But the stock apears to be less risky and, when comparing its historical volatility, China Vanke Co is 2.59 times less risky than Shandong Homey. The stock trades about -0.12 of its potential returns per unit of risk. The Shandong Homey Aquatic is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 221.00 in Shandong Homey Aquatic on September 5, 2024 and sell it today you would earn a total of 40.00 from holding Shandong Homey Aquatic or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Vanke Co vs. Shandong Homey Aquatic
Performance |
| Timeline |
| China Vanke |
| Shandong Homey Aquatic |
China Vanke and Shandong Homey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Vanke and Shandong Homey
The main advantage of trading using opposite China Vanke and Shandong Homey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke position performs unexpectedly, Shandong Homey 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 Shandong Homey will offset losses from the drop in Shandong Homey's long position.| China Vanke vs. Nanjing Putian Telecommunications | China Vanke vs. Tianjin Realty Development | China Vanke vs. Shenyang Huitian Thermal | China Vanke vs. Shenzhen Changfang Light |
| Shandong Homey vs. Poly Real Estate | Shandong Homey vs. China Vanke Co | Shandong Homey vs. China Merchants Shekou | Shandong Homey vs. Huafa Industrial 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 CEOs Directory module to screen CEOs from public companies around the world.
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