Correlation Between China Datang and Retail Estates
Can any of the company-specific risk be diversified away by investing in both China Datang and Retail Estates 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 Datang and Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and Retail Estates NV, you can compare the effects of market volatilities on China Datang and Retail Estates 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 Datang with a short position of Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and Retail Estates.
Diversification Opportunities for China Datang and Retail Estates
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Retail is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Datang and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV and China Datang 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 Datang are associated (or correlated) with Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of China Datang i.e., China Datang and Retail Estates go up and down completely randomly.
Pair Corralation between China Datang and Retail Estates
Assuming the 90 days horizon China Datang is expected to generate 2.05 times more return on investment than Retail Estates. However, China Datang is 2.05 times more volatile than Retail Estates NV. It trades about 0.11 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.09 per unit of risk. If you would invest 23.00 in China Datang on October 30, 2024 and sell it today you would earn a total of 2.00 from holding China Datang or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Datang vs. Retail Estates NV
Performance |
| Timeline |
| China Datang |
| Retail Estates NV |
China Datang and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and Retail Estates
The main advantage of trading using opposite China Datang and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| China Datang vs. Broadridge Financial Solutions | China Datang vs. COPLAND ROAD CAPITAL | China Datang vs. CanSino Biologics | China Datang vs. SAN MIGUEL BREWERY |
| Retail Estates vs. SILICON LABORATOR | Retail Estates vs. PTT Global Chemical | Retail Estates vs. PKSHA TECHNOLOGY INC | Retail Estates vs. SEKISUI CHEMICAL |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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