Correlation Between Country Garden and Anhui Conch
Can any of the company-specific risk be diversified away by investing in both Country Garden and Anhui Conch 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 Country Garden and Anhui Conch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Country Garden Holdings and Anhui Conch Cement, you can compare the effects of market volatilities on Country Garden and Anhui Conch 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 Country Garden with a short position of Anhui Conch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and Anhui Conch.
Diversification Opportunities for Country Garden and Anhui Conch
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Country and Anhui is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and Country Garden 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 Country Garden Holdings are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of Country Garden i.e., Country Garden and Anhui Conch go up and down completely randomly.
Pair Corralation between Country Garden and Anhui Conch
Assuming the 90 days horizon Country Garden Holdings is expected to generate 13.06 times more return on investment than Anhui Conch. However, Country Garden is 13.06 times more volatile than Anhui Conch Cement. It trades about 0.1 of its potential returns per unit of risk. Anhui Conch Cement is currently generating about 0.05 per unit of risk. If you would invest 16.00 in Country Garden Holdings on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Country Garden Holdings or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Country Garden Holdings vs. Anhui Conch Cement
Performance |
| Timeline |
| Country Garden Holdings |
| Anhui Conch Cement |
Country Garden and Anhui Conch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Garden and Anhui Conch
The main advantage of trading using opposite Country Garden and Anhui Conch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, Anhui Conch 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 Anhui Conch will offset losses from the drop in Anhui Conch's long position.| Country Garden vs. HUMANA INC | Country Garden vs. SCOR PK | Country Garden vs. Aquagold International | Country Garden vs. Thrivent High Yield |
| Anhui Conch vs. Buzzi Unicem SpA | Anhui Conch vs. Wienerberger Baustoffindustrie | Anhui Conch vs. Lafargeholcim Ltd ADR | Anhui Conch vs. HeidelbergCement AG ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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