Correlation Between NOHO and Country Garden
Can any of the company-specific risk be diversified away by investing in both NOHO and Country Garden 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 NOHO and Country Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOHO Inc and Country Garden Holdings, you can compare the effects of market volatilities on NOHO and Country Garden 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 NOHO with a short position of Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOHO and Country Garden.
Diversification Opportunities for NOHO and Country Garden
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NOHO and Country is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding NOHO Inc and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings and NOHO 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 NOHO Inc are associated (or correlated) with Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of NOHO i.e., NOHO and Country Garden go up and down completely randomly.
Pair Corralation between NOHO and Country Garden
Given the investment horizon of 90 days NOHO is expected to generate 1.06 times less return on investment than Country Garden. In addition to that, NOHO is 1.46 times more volatile than Country Garden Holdings. It trades about 0.04 of its total potential returns per unit of risk. Country Garden Holdings is currently generating about 0.06 per unit of volatility. If you would invest 367.00 in Country Garden Holdings on August 28, 2024 and sell it today you would earn a total of 8.00 from holding Country Garden Holdings or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.2% |
| Values | Daily Returns |
NOHO Inc vs. Country Garden Holdings
Performance |
| Timeline |
| NOHO Inc |
| Country Garden Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
NOHO and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOHO and Country Garden
The main advantage of trading using opposite NOHO and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOHO position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden's long position.| NOHO vs. National Beverage Corp | NOHO vs. Vita Coco | NOHO vs. Hill Street Beverage | NOHO vs. Alkame Holdings |
| Country Garden vs. Longfor Properties Co | Country Garden vs. China Overseas Land | Country Garden vs. Country Garden Holdings | Country Garden vs. China Resources Land |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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