Correlation Between CTP NV and China Resources
Can any of the company-specific risk be diversified away by investing in both CTP NV and China Resources 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 CTP NV and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTP NV EO and China Resources Land, you can compare the effects of market volatilities on CTP NV and China Resources 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 CTP NV with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTP NV and China Resources.
Diversification Opportunities for CTP NV and China Resources
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CTP and China is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding CTP NV EO and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and CTP NV 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 CTP NV EO are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of CTP NV i.e., CTP NV and China Resources go up and down completely randomly.
Pair Corralation between CTP NV and China Resources
Assuming the 90 days horizon CTP NV EO is expected to generate 0.93 times more return on investment than China Resources. However, CTP NV EO is 1.08 times less risky than China Resources. It trades about 0.15 of its potential returns per unit of risk. China Resources Land is currently generating about 0.07 per unit of risk. If you would invest 1,486 in CTP NV EO on October 29, 2024 and sell it today you would earn a total of 68.00 from holding CTP NV EO or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTP NV EO vs. China Resources Land
Performance |
| Timeline |
| CTP NV EO |
| China Resources Land |
CTP NV and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTP NV and China Resources
The main advantage of trading using opposite CTP NV and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTP NV position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' long position.| CTP NV vs. SBI Insurance Group | CTP NV vs. VIENNA INSURANCE GR | CTP NV vs. Kingdee International Software | CTP NV vs. Goosehead Insurance |
| China Resources vs. PEPTONIC MEDICAL | China Resources vs. Diamyd Medical AB | China Resources vs. Apollo Investment Corp | China Resources vs. CompuGroup Medical SE |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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