Correlation Between Country Garden and EGRNF
Can any of the company-specific risk be diversified away by investing in both Country Garden and EGRNF 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 EGRNF 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 EGRNF, you can compare the effects of market volatilities on Country Garden and EGRNF 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 EGRNF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and EGRNF.
Diversification Opportunities for Country Garden and EGRNF
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Country and EGRNF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and EGRNF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGRNF 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 EGRNF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGRNF has no effect on the direction of Country Garden i.e., Country Garden and EGRNF go up and down completely randomly.
Pair Corralation between Country Garden and EGRNF
Assuming the 90 days horizon Country Garden is expected to generate 111.6 times less return on investment than EGRNF. But when comparing it to its historical volatility, Country Garden Holdings is 15.41 times less risky than EGRNF. It trades about 0.02 of its potential returns per unit of risk. EGRNF is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 9.00 in EGRNF on August 24, 2024 and sell it today you would lose (8.97) from holding EGRNF or give up 99.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Country Garden Holdings vs. EGRNF
Performance |
| Timeline |
| Country Garden Holdings |
| EGRNF |
Country Garden and EGRNF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Garden and EGRNF
The main advantage of trading using opposite Country Garden and EGRNF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, EGRNF 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 EGRNF will offset losses from the drop in EGRNF's long position.| Country Garden vs. Sun Hung Kai | Country Garden vs. Sun Hung Kai | Country Garden vs. China Resources Land | Country Garden vs. China Resources Land |
| EGRNF vs. Hong Kong Land | EGRNF vs. Wharf Holdings | EGRNF vs. Holiday Island Holdings | EGRNF vs. Sun Hung Kai |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |