Correlation Between Neinor Homes and CHINA EAST
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and CHINA EAST 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 Neinor Homes and CHINA EAST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and CHINA EAST ED, you can compare the effects of market volatilities on Neinor Homes and CHINA EAST 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 Neinor Homes with a short position of CHINA EAST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and CHINA EAST.
Diversification Opportunities for Neinor Homes and CHINA EAST
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neinor and CHINA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and CHINA EAST ED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EAST ED and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with CHINA EAST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EAST ED has no effect on the direction of Neinor Homes i.e., Neinor Homes and CHINA EAST go up and down completely randomly.
Pair Corralation between Neinor Homes and CHINA EAST
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 1.04 times more return on investment than CHINA EAST. However, Neinor Homes is 1.04 times more volatile than CHINA EAST ED. It trades about 0.43 of its potential returns per unit of risk. CHINA EAST ED is currently generating about -0.45 per unit of risk. If you would invest 1,540 in Neinor Homes SA on October 13, 2024 and sell it today you would earn a total of 148.00 from holding Neinor Homes SA or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. CHINA EAST ED
Performance |
| Timeline |
| Neinor Homes SA |
| CHINA EAST ED |
Neinor Homes and CHINA EAST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and CHINA EAST
The main advantage of trading using opposite Neinor Homes and CHINA EAST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, CHINA EAST 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 CHINA EAST will offset losses from the drop in CHINA EAST's long position.| Neinor Homes vs. REMEDY ENTERTAINMENT OYJ | Neinor Homes vs. Hollywood Bowl Group | Neinor Homes vs. Nexstar Media Group | Neinor Homes vs. CNVISION MEDIA |
| CHINA EAST vs. INDO RAMA SYNTHETIC | CHINA EAST vs. Kingdee International Software | CHINA EAST vs. Soken Chemical Engineering | CHINA EAST vs. Siamgas And Petrochemicals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |