Correlation Between Confluent and China Overseas
Can any of the company-specific risk be diversified away by investing in both Confluent and China Overseas 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 Confluent and China Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Confluent and China Overseas Land, you can compare the effects of market volatilities on Confluent and China Overseas 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 Confluent with a short position of China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Confluent and China Overseas.
Diversification Opportunities for Confluent and China Overseas
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Confluent and China is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Confluent and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and Confluent 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 Confluent are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Confluent i.e., Confluent and China Overseas go up and down completely randomly.
Pair Corralation between Confluent and China Overseas
Given the investment horizon of 90 days Confluent is expected to generate 15.19 times more return on investment than China Overseas. However, Confluent is 15.19 times more volatile than China Overseas Land. It trades about 0.23 of its potential returns per unit of risk. China Overseas Land is currently generating about -0.28 per unit of risk. If you would invest 2,670 in Confluent on November 18, 2024 and sell it today you would earn a total of 815.00 from holding Confluent or generate 30.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Confluent vs. China Overseas Land
Performance |
| Timeline |
| Confluent |
| China Overseas Land |
Confluent and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Confluent and China Overseas
The main advantage of trading using opposite Confluent and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Confluent position performs unexpectedly, China Overseas 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 Overseas will offset losses from the drop in China Overseas' long position.| Confluent vs. DigitalOcean Holdings | Confluent vs. Doximity | Confluent vs. Gitlab Inc | Confluent vs. Global E Online |
| China Overseas vs. Sun Hung Kai | China Overseas vs. China Overseas Land | China Overseas vs. EGRNF | China Overseas vs. Sino Land Co |
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.
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