Correlation Between Alset Ehome and China Vanke
Can any of the company-specific risk be diversified away by investing in both Alset Ehome 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 Alset Ehome and China Vanke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alset Ehome International and China Vanke Co, you can compare the effects of market volatilities on Alset Ehome 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 Alset Ehome with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alset Ehome and China Vanke.
Diversification Opportunities for Alset Ehome and China Vanke
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alset and China is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Alset Ehome International and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and Alset Ehome 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 Alset Ehome International 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 has no effect on the direction of Alset Ehome i.e., Alset Ehome and China Vanke go up and down completely randomly.
Pair Corralation between Alset Ehome and China Vanke
Considering the 90-day investment horizon Alset Ehome is expected to generate 3.57 times less return on investment than China Vanke. But when comparing it to its historical volatility, Alset Ehome International is 1.56 times less risky than China Vanke. It trades about 0.01 of its potential returns per unit of risk. China Vanke Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 162.00 in China Vanke Co on August 28, 2024 and sell it today you would lose (63.00) from holding China Vanke Co or give up 38.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.2% |
| Values | Daily Returns |
Alset Ehome International vs. China Vanke Co
Performance |
| Timeline |
| Alset Ehome International |
| China Vanke |
Alset Ehome and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alset Ehome and China Vanke
The main advantage of trading using opposite Alset Ehome and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alset Ehome 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.| Alset Ehome vs. Xinyuan Real Estate | Alset Ehome vs. AMREP | Alset Ehome vs. Landsea Homes Corp | Alset Ehome vs. Sino Land Co |
| China Vanke vs. Alset Ehome International | China Vanke vs. Sino Land Co | China Vanke vs. Holiday Island Holdings | China Vanke vs. Sun Hung Kai |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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