Correlation Between REDSUN PROPERTIES and GANGLONG CHINA
Can any of the company-specific risk be diversified away by investing in both REDSUN PROPERTIES and GANGLONG CHINA 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 REDSUN PROPERTIES and GANGLONG CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REDSUN PROPERTIES GROUP and GANGLONG CHINA PRGRLTD, you can compare the effects of market volatilities on REDSUN PROPERTIES and GANGLONG 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 REDSUN PROPERTIES with a short position of GANGLONG CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDSUN PROPERTIES and GANGLONG CHINA.
Diversification Opportunities for REDSUN PROPERTIES and GANGLONG CHINA
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REDSUN and GANGLONG is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding REDSUN PROPERTIES GROUP and GANGLONG CHINA PRGRLTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GANGLONG CHINA PRGRLTD and REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP are associated (or correlated) with GANGLONG CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GANGLONG CHINA PRGRLTD has no effect on the direction of REDSUN PROPERTIES i.e., REDSUN PROPERTIES and GANGLONG CHINA go up and down completely randomly.
Pair Corralation between REDSUN PROPERTIES and GANGLONG CHINA
Assuming the 90 days horizon REDSUN PROPERTIES is expected to generate 3.73 times less return on investment than GANGLONG CHINA. But when comparing it to its historical volatility, REDSUN PROPERTIES GROUP is 2.93 times less risky than GANGLONG CHINA. It trades about 0.06 of its potential returns per unit of risk. GANGLONG CHINA PRGRLTD is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 6.50 in GANGLONG CHINA PRGRLTD on October 28, 2024 and sell it today you would lose (5.60) from holding GANGLONG CHINA PRGRLTD or give up 86.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
REDSUN PROPERTIES GROUP vs. GANGLONG CHINA PRGRLTD
Performance |
| Timeline |
| REDSUN PROPERTIES |
| GANGLONG CHINA PRGRLTD |
REDSUN PROPERTIES and GANGLONG CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REDSUN PROPERTIES and GANGLONG CHINA
The main advantage of trading using opposite REDSUN PROPERTIES and GANGLONG CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REDSUN PROPERTIES position performs unexpectedly, GANGLONG 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 GANGLONG CHINA will offset losses from the drop in GANGLONG CHINA's long position.| REDSUN PROPERTIES vs. Alaska Air Group | REDSUN PROPERTIES vs. Corsair Gaming | REDSUN PROPERTIES vs. SERI INDUSTRIAL EO | REDSUN PROPERTIES vs. FIREWEED METALS P |
| GANGLONG CHINA vs. China Resources Land | GANGLONG CHINA vs. CTP NV EO | GANGLONG CHINA vs. Superior Plus Corp | GANGLONG CHINA vs. Origin Agritech |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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