Correlation Between Country Garden and Wharf Holdings
Can any of the company-specific risk be diversified away by investing in both Country Garden and Wharf Holdings 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 Wharf Holdings 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 Wharf Holdings, you can compare the effects of market volatilities on Country Garden and Wharf Holdings 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 Wharf Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and Wharf Holdings.
Diversification Opportunities for Country Garden and Wharf Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Country and Wharf is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Wharf Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wharf Holdings 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 Wharf Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wharf Holdings has no effect on the direction of Country Garden i.e., Country Garden and Wharf Holdings go up and down completely randomly.
Pair Corralation between Country Garden and Wharf Holdings
Assuming the 90 days horizon Country Garden Holdings is expected to generate 3.56 times more return on investment than Wharf Holdings. However, Country Garden is 3.56 times more volatile than Wharf Holdings. It trades about 0.02 of its potential returns per unit of risk. Wharf Holdings is currently generating about 0.02 per unit of risk. If you would invest 858.00 in Country Garden Holdings on November 2, 2024 and sell it today you would lose (483.00) from holding Country Garden Holdings or give up 56.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.67% |
| Values | Daily Returns |
Country Garden Holdings vs. Wharf Holdings
Performance |
| Timeline |
| Country Garden Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Wharf Holdings |
Country Garden and Wharf Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Garden and Wharf Holdings
The main advantage of trading using opposite Country Garden and Wharf Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, Wharf Holdings 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 Wharf Holdings will offset losses from the drop in Wharf Holdings' long position.| Country Garden vs. Longfor Properties Co | Country Garden vs. China Overseas Land | Country Garden vs. China Resources Land | Country Garden vs. Anhui Conch Cement |
| Wharf Holdings vs. Sino Land Co | Wharf Holdings vs. Hong Kong Land | Wharf Holdings vs. Holiday Island Holdings | Wharf Holdings 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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