Correlation Between Daiwa House and China Overseas
Can any of the company-specific risk be diversified away by investing in both Daiwa House and China Overseas 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 Daiwa House and China Overseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiwa House Industry and China Overseas Land, you can compare the effects of market volatilities on Daiwa House and China Overseas 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 Daiwa House with a short position of China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiwa House and China Overseas.
Diversification Opportunities for Daiwa House and China Overseas
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daiwa and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Daiwa House Industry and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and Daiwa House 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 Daiwa House Industry are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Daiwa House i.e., Daiwa House and China Overseas go up and down completely randomly.
Pair Corralation between Daiwa House and China Overseas
Assuming the 90 days horizon Daiwa House Industry is expected to generate 0.31 times more return on investment than China Overseas. However, Daiwa House Industry is 3.2 times less risky than China Overseas. It trades about 0.06 of its potential returns per unit of risk. China Overseas Land is currently generating about 0.0 per unit of risk. If you would invest 2,141 in Daiwa House Industry on August 24, 2024 and sell it today you would earn a total of 853.00 from holding Daiwa House Industry or generate 39.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Daiwa House Industry vs. China Overseas Land
Performance |
| Timeline |
| Daiwa House Industry |
| China Overseas Land |
Daiwa House and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daiwa House and China Overseas
The main advantage of trading using opposite Daiwa House and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiwa House position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| Daiwa House vs. Sino Land Co | Daiwa House vs. Sun Hung Kai | Daiwa House vs. Holiday Island Holdings | Daiwa House vs. China Overseas Land |
| China Overseas vs. Sun Hung Kai | China Overseas vs. Sun Hung Kai | China Overseas vs. China Resources Land | China Overseas 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |