Correlation Between China Overseas and Sino Land
Can any of the company-specific risk be diversified away by investing in both China Overseas and Sino Land 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 Sino Land 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 Sino Land Co, you can compare the effects of market volatilities on China Overseas and Sino Land 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 Sino Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Sino Land.
Diversification Opportunities for China Overseas and Sino Land
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Sino is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding China Overseas Land and Sino Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino Land 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 Sino Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino Land has no effect on the direction of China Overseas i.e., China Overseas and Sino Land go up and down completely randomly.
Pair Corralation between China Overseas and Sino Land
Assuming the 90 days horizon China Overseas Land is expected to generate 2.29 times more return on investment than Sino Land. However, China Overseas is 2.29 times more volatile than Sino Land Co. It trades about 0.01 of its potential returns per unit of risk. Sino Land Co is currently generating about 0.0 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 Together |
| Strength | Very Weak |
| Accuracy | 91.19% |
| Values | Daily Returns |
China Overseas Land vs. Sino Land Co
Performance |
| Timeline |
| China Overseas Land |
| Sino Land |
China Overseas and Sino Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Overseas and Sino Land
The main advantage of trading using opposite China Overseas and Sino Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Overseas position performs unexpectedly, Sino Land 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 Sino Land will offset losses from the drop in Sino Land's long position.| China Overseas vs. HUMANA INC | China Overseas vs. SCOR PK | China Overseas vs. Aquagold International | China Overseas vs. Thrivent High Yield |
| Sino Land vs. HUMANA INC | Sino Land vs. SCOR PK | Sino Land vs. Aquagold International | Sino Land 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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