Correlation Between COFCO Joycome and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and INVITATION HOMES 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 COFCO Joycome and INVITATION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and INVITATION HOMES DL, you can compare the effects of market volatilities on COFCO Joycome and INVITATION HOMES 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 COFCO Joycome with a short position of INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and INVITATION HOMES.
Diversification Opportunities for COFCO Joycome and INVITATION HOMES
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COFCO and INVITATION is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and INVITATION HOMES go up and down completely randomly.
Pair Corralation between COFCO Joycome and INVITATION HOMES
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the INVITATION HOMES. In addition to that, COFCO Joycome is 2.61 times more volatile than INVITATION HOMES DL. It trades about -0.02 of its total potential returns per unit of risk. INVITATION HOMES DL is currently generating about 0.02 per unit of volatility. If you would invest 2,698 in INVITATION HOMES DL on October 16, 2024 and sell it today you would earn a total of 262.00 from holding INVITATION HOMES DL or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. INVITATION HOMES DL
Performance |
| Timeline |
| COFCO Joycome Foods |
| INVITATION HOMES |
COFCO Joycome and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and INVITATION HOMES
The main advantage of trading using opposite COFCO Joycome and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.| COFCO Joycome vs. Cairo Communication SpA | COFCO Joycome vs. ecotel communication ag | COFCO Joycome vs. Harmony Gold Mining | COFCO Joycome vs. Zoom Video Communications |
| INVITATION HOMES vs. Alfa Financial Software | INVITATION HOMES vs. AEON METALS LTD | INVITATION HOMES vs. Transport International Holdings | INVITATION HOMES vs. UPDATE SOFTWARE |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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