Correlation Between REGAL ASIAN and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and CHINA VANKE 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 REGAL ASIAN and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and CHINA VANKE TD, you can compare the effects of market volatilities on REGAL ASIAN and CHINA VANKE 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 REGAL ASIAN with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and CHINA VANKE.
Diversification Opportunities for REGAL ASIAN and CHINA VANKE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and CHINA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and CHINA VANKE go up and down completely randomly.
Pair Corralation between REGAL ASIAN and CHINA VANKE
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 2.41 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 4.52 times less risky than CHINA VANKE. It trades about 0.04 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in CHINA VANKE TD on September 14, 2024 and sell it today you would lose (15.00) from holding CHINA VANKE TD or give up 16.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. CHINA VANKE TD
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| CHINA VANKE TD |
REGAL ASIAN and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and CHINA VANKE
The main advantage of trading using opposite REGAL ASIAN and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, CHINA VANKE 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 VANKE will offset losses from the drop in CHINA VANKE's long position.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
| CHINA VANKE vs. PennantPark Investment | CHINA VANKE vs. REGAL ASIAN INVESTMENTS | CHINA VANKE vs. CDL INVESTMENT | CHINA VANKE vs. DIVERSIFIED ROYALTY |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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