Correlation Between China Overseas and City Developments
Can any of the company-specific risk be diversified away by investing in both China Overseas and City Developments 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 China Overseas and City Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Overseas Land and City Developments, you can compare the effects of market volatilities on China Overseas and City Developments 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 China Overseas with a short position of City Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and City Developments.
Diversification Opportunities for China Overseas and City Developments
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and City is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and City Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Developments and China Overseas 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 China Overseas Land are associated (or correlated) with City Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Developments has no effect on the direction of China Overseas i.e., China Overseas and City Developments go up and down completely randomly.
Pair Corralation between China Overseas and City Developments
Assuming the 90 days horizon China Overseas Land is expected to generate 2.58 times more return on investment than City Developments. However, China Overseas is 2.58 times more volatile than City Developments. It trades about 0.01 of its potential returns per unit of risk. City Developments is currently generating about -0.02 per unit of risk. If you would invest 215.00 in China Overseas Land on August 31, 2024 and sell it today you would lose (50.00) from holding China Overseas Land or give up 23.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.83% |
| Values | Daily Returns |
China Overseas Land vs. City Developments
Performance |
| Timeline |
| China Overseas Land |
| City Developments |
China Overseas and City Developments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Overseas and City Developments
The main advantage of trading using opposite China Overseas and City Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Overseas position performs unexpectedly, City Developments 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 City Developments will offset losses from the drop in City Developments' long position.| China Overseas vs. HUMANA INC | China Overseas vs. SCOR PK | China Overseas vs. Aquagold International | China Overseas vs. Thrivent High Yield |
| City Developments vs. HUMANA INC | City Developments vs. SCOR PK | City Developments vs. Aquagold International | City Developments vs. Thrivent High Yield |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |