Correlation Between China Resources and DEUTSCHE WOHNEN
Can any of the company-specific risk be diversified away by investing in both China Resources and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN ADRS12, you can compare the effects of market volatilities on China Resources and DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and DEUTSCHE WOHNEN.
Diversification Opportunities for China Resources and DEUTSCHE WOHNEN
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and DEUTSCHE is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Land and DEUTSCHE WOHNEN ADRS12 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEUTSCHE WOHNEN ADRS12 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 DEUTSCHE WOHNEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEUTSCHE WOHNEN ADRS12 has no effect on the direction of China Resources i.e., China Resources and DEUTSCHE WOHNEN go up and down completely randomly.
Pair Corralation between China Resources and DEUTSCHE WOHNEN
Assuming the 90 days horizon China Resources Land is expected to generate 1.76 times more return on investment than DEUTSCHE WOHNEN. However, China Resources is 1.76 times more volatile than DEUTSCHE WOHNEN ADRS12. It trades about 0.05 of its potential returns per unit of risk. DEUTSCHE WOHNEN ADRS12 is currently generating about 0.02 per unit of risk. If you would invest 143.00 in China Resources Land on September 24, 2024 and sell it today you would earn a total of 127.00 from holding China Resources Land or generate 88.81% 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. DEUTSCHE WOHNEN ADRS12
Performance |
| Timeline |
| China Resources Land |
| DEUTSCHE WOHNEN ADRS12 |
China Resources and DEUTSCHE WOHNEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and DEUTSCHE WOHNEN
The main advantage of trading using opposite China Resources and DEUTSCHE WOHNEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, DEUTSCHE WOHNEN 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 DEUTSCHE WOHNEN will offset losses from the drop in DEUTSCHE WOHNEN's long position.| China Resources vs. Fukuyama Transporting Co | China Resources vs. SPORT LISBOA E | China Resources vs. Gaztransport Technigaz SA | China Resources vs. Compugroup Medical SE |
| DEUTSCHE WOHNEN vs. China Resources Land | DEUTSCHE WOHNEN vs. CTP NV EO | DEUTSCHE WOHNEN vs. SEAZEN GROUP LTD | DEUTSCHE WOHNEN vs. Atrium Ljungberg AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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