Correlation Between China Resources and Yanlord Land
Can any of the company-specific risk be diversified away by investing in both China Resources and Yanlord 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 Resources and Yanlord Land 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 Yanlord Land Group, you can compare the effects of market volatilities on China Resources and Yanlord 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 Resources with a short position of Yanlord Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Yanlord Land.
Diversification Opportunities for China Resources and Yanlord Land
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Yanlord is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Land and Yanlord Land Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yanlord Land Group 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 Yanlord Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yanlord Land Group has no effect on the direction of China Resources i.e., China Resources and Yanlord Land go up and down completely randomly.
Pair Corralation between China Resources and Yanlord Land
Assuming the 90 days horizon China Resources is expected to generate 27.22 times less return on investment than Yanlord Land. But when comparing it to its historical volatility, China Resources Land is 4.07 times less risky than Yanlord Land. It trades about 0.02 of its potential returns per unit of risk. Yanlord Land Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 657.00 in Yanlord Land Group on August 30, 2024 and sell it today you would earn a total of 405.00 from holding Yanlord Land Group or generate 61.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Land vs. Yanlord Land Group
Performance |
| Timeline |
| China Resources Land |
| Yanlord Land Group |
China Resources and Yanlord Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Yanlord Land
The main advantage of trading using opposite China Resources and Yanlord Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Yanlord 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 Yanlord Land will offset losses from the drop in Yanlord Land's long position.| China Resources vs. Sun Hung Kai | China Resources vs. Sino Land Co | China Resources vs. Holiday Island Holdings |
| Yanlord Land vs. Viemed Healthcare | Yanlord Land vs. Southwest Gas Holdings | Yanlord Land vs. BioNTech SE | Yanlord Land vs. NRG Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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