Correlation Between China Resources and CTP NV
Can any of the company-specific risk be diversified away by investing in both China Resources and CTP NV 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 Resources and CTP NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Land and CTP NV EO, you can compare the effects of market volatilities on China Resources and CTP NV 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 Resources with a short position of CTP NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and CTP NV.
Diversification Opportunities for China Resources and CTP NV
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and CTP is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Land and CTP NV EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTP NV EO and China Resources 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 Resources Land are associated (or correlated) with CTP NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTP NV EO has no effect on the direction of China Resources i.e., China Resources and CTP NV go up and down completely randomly.
Pair Corralation between China Resources and CTP NV
Assuming the 90 days horizon China Resources is expected to generate 16.01 times less return on investment than CTP NV. In addition to that, China Resources is 1.03 times more volatile than CTP NV EO. It trades about 0.01 of its total potential returns per unit of risk. CTP NV EO is currently generating about 0.15 per unit of volatility. If you would invest 1,496 in CTP NV EO on November 8, 2024 and sell it today you would earn a total of 84.00 from holding CTP NV EO or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Land vs. CTP NV EO
Performance |
| Timeline |
| China Resources Land |
| CTP NV EO |
China Resources and CTP NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and CTP NV
The main advantage of trading using opposite China Resources and CTP NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, CTP NV 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 CTP NV will offset losses from the drop in CTP NV's long position.| China Resources vs. The Japan Steel | China Resources vs. United States Steel | China Resources vs. ELL ENVIRONHLDGS HD 0001 | China Resources vs. Samsung Electronics Co |
| CTP NV vs. SINGAPORE AIRLINES | CTP NV vs. Waste Management | CTP NV vs. Aegean Airlines SA | CTP NV vs. RCI Hospitality Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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