Correlation Between CHINA VANKE and Mitsui Fudosan
Can any of the company-specific risk be diversified away by investing in both CHINA VANKE and Mitsui Fudosan 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 CHINA VANKE and Mitsui Fudosan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA VANKE TD and Mitsui Fudosan Co, you can compare the effects of market volatilities on CHINA VANKE and Mitsui Fudosan 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 Mitsui Fudosan. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA VANKE and Mitsui Fudosan.
Diversification Opportunities for CHINA VANKE and Mitsui Fudosan
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CHINA and Mitsui is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CHINA VANKE TD and Mitsui Fudosan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Fudosan 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 TD are associated (or correlated) with Mitsui Fudosan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Fudosan has no effect on the direction of CHINA VANKE i.e., CHINA VANKE and Mitsui Fudosan go up and down completely randomly.
Pair Corralation between CHINA VANKE and Mitsui Fudosan
Assuming the 90 days horizon CHINA VANKE TD is expected to generate 2.35 times more return on investment than Mitsui Fudosan. However, CHINA VANKE is 2.35 times more volatile than Mitsui Fudosan Co. It trades about 0.14 of its potential returns per unit of risk. Mitsui Fudosan Co is currently generating about 0.31 per unit of risk. If you would invest 63.00 in CHINA VANKE TD on November 2, 2024 and sell it today you would earn a total of 8.00 from holding CHINA VANKE TD or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA VANKE TD vs. Mitsui Fudosan Co
Performance |
| Timeline |
| CHINA VANKE TD |
| Mitsui Fudosan |
CHINA VANKE and Mitsui Fudosan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA VANKE and Mitsui Fudosan
The main advantage of trading using opposite CHINA VANKE and Mitsui Fudosan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA VANKE position performs unexpectedly, Mitsui Fudosan 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 Mitsui Fudosan will offset losses from the drop in Mitsui Fudosan's long position.| CHINA VANKE vs. OURGAME INTHOLDL 00005 | CHINA VANKE vs. Alliance Data Systems | CHINA VANKE vs. TERADATA | CHINA VANKE vs. GAMING FAC SA |
| Mitsui Fudosan vs. China Overseas Land | Mitsui Fudosan vs. Sino Land | Mitsui Fudosan vs. Hongkong Land Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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