Correlation Between LANDSEA HOMES and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both LANDSEA HOMES and TIMES CHINA 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 LANDSEA HOMES and TIMES CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANDSEA HOMES P and TIMES CHINA HLDGS, you can compare the effects of market volatilities on LANDSEA HOMES and TIMES CHINA 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 LANDSEA HOMES with a short position of TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANDSEA HOMES and TIMES CHINA.
Diversification Opportunities for LANDSEA HOMES and TIMES CHINA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LANDSEA and TIMES is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA HOMES P and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS and LANDSEA 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 LANDSEA HOMES P are associated (or correlated) with TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of LANDSEA HOMES i.e., LANDSEA HOMES and TIMES CHINA go up and down completely randomly.
Pair Corralation between LANDSEA HOMES and TIMES CHINA
Assuming the 90 days horizon LANDSEA HOMES is expected to generate 3.9 times less return on investment than TIMES CHINA. But when comparing it to its historical volatility, LANDSEA HOMES P is 5.28 times less risky than TIMES CHINA. It trades about 0.07 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 20.00 in TIMES CHINA HLDGS on September 3, 2024 and sell it today you would lose (15.95) from holding TIMES CHINA HLDGS or give up 79.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LANDSEA HOMES P vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| LANDSEA HOMES P |
| TIMES CHINA HLDGS |
LANDSEA HOMES and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANDSEA HOMES and TIMES CHINA
The main advantage of trading using opposite LANDSEA HOMES and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA HOMES position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| LANDSEA HOMES vs. Greenland Hong Kong | LANDSEA HOMES vs. Superior Plus Corp | LANDSEA HOMES vs. NMI Holdings | LANDSEA HOMES vs. Origin Agritech |
| TIMES CHINA vs. FORMPIPE SOFTWARE AB | TIMES CHINA vs. Magic Software Enterprises | TIMES CHINA vs. Take Two Interactive Software | TIMES CHINA vs. GungHo Online Entertainment |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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