Correlation Between GANGLONG CHINA and CTP NV
Can any of the company-specific risk be diversified away by investing in both GANGLONG CHINA and CTP NV 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 GANGLONG CHINA and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GANGLONG CHINA PRGRLTD and CTP NV EO, you can compare the effects of market volatilities on GANGLONG CHINA and CTP NV 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 GANGLONG CHINA with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of GANGLONG CHINA and CTP NV.
Diversification Opportunities for GANGLONG CHINA and CTP NV
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GANGLONG and CTP is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding GANGLONG CHINA PRGRLTD and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO and GANGLONG CHINA 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 GANGLONG CHINA PRGRLTD are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of GANGLONG CHINA i.e., GANGLONG CHINA and CTP NV go up and down completely randomly.
Pair Corralation between GANGLONG CHINA and CTP NV
Assuming the 90 days horizon GANGLONG CHINA PRGRLTD is expected to generate 77.07 times more return on investment than CTP NV. However, GANGLONG CHINA is 77.07 times more volatile than CTP NV EO. It trades about 0.09 of its potential returns per unit of risk. CTP NV EO is currently generating about -0.03 per unit of risk. If you would invest 1.00 in GANGLONG CHINA PRGRLTD on September 26, 2024 and sell it today you would lose (0.10) from holding GANGLONG CHINA PRGRLTD or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GANGLONG CHINA PRGRLTD vs. CTP NV EO
Performance |
| Timeline |
| GANGLONG CHINA PRGRLTD |
| CTP NV EO |
GANGLONG CHINA and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GANGLONG CHINA and CTP NV
The main advantage of trading using opposite GANGLONG CHINA and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GANGLONG CHINA position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| GANGLONG CHINA vs. China Resources Land | GANGLONG CHINA vs. DEUTSCHE WOHNEN ADRS12 | GANGLONG CHINA vs. CTP NV EO | GANGLONG CHINA vs. SEAZEN GROUP LTD |
| CTP NV vs. China Resources Land | CTP NV vs. DEUTSCHE WOHNEN ADRS12 | CTP NV vs. SEAZEN GROUP LTD | CTP NV vs. Atrium Ljungberg AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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