Correlation Between Hitachi Construction and COUNTRY GARDEN
Can any of the company-specific risk be diversified away by investing in both Hitachi Construction 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 Hitachi Construction and COUNTRY GARDEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hitachi Construction Machinery and COUNTRY GARDEN SVDL 0001, you can compare the effects of market volatilities on Hitachi Construction 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 Hitachi Construction with a short position of COUNTRY GARDEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitachi Construction and COUNTRY GARDEN.
Diversification Opportunities for Hitachi Construction and COUNTRY GARDEN
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hitachi and COUNTRY is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hitachi Construction Machinery and COUNTRY GARDEN SVDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COUNTRY GARDEN SVDL and Hitachi Construction 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 Hitachi Construction Machinery 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 SVDL has no effect on the direction of Hitachi Construction i.e., Hitachi Construction and COUNTRY GARDEN go up and down completely randomly.
Pair Corralation between Hitachi Construction and COUNTRY GARDEN
Assuming the 90 days horizon Hitachi Construction is expected to generate 26.37 times less return on investment than COUNTRY GARDEN. But when comparing it to its historical volatility, Hitachi Construction Machinery is 4.69 times less risky than COUNTRY GARDEN. It trades about 0.01 of its potential returns per unit of risk. COUNTRY GARDEN SVDL 0001 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 37.00 in COUNTRY GARDEN SVDL 0001 on November 28, 2024 and sell it today you would earn a total of 25.00 from holding COUNTRY GARDEN SVDL 0001 or generate 67.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Hitachi Construction Machinery vs. COUNTRY GARDEN SVDL 0001
Performance |
| Timeline |
| Hitachi Construction |
| COUNTRY GARDEN SVDL |
Hitachi Construction and COUNTRY GARDEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hitachi Construction and COUNTRY GARDEN
The main advantage of trading using opposite Hitachi Construction and COUNTRY GARDEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitachi Construction 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.| Hitachi Construction vs. Vulcan Materials | Hitachi Construction vs. ScanSource | Hitachi Construction vs. EEDUCATION ALBERT AB | Hitachi Construction vs. Heidelberg Materials AG |
| COUNTRY GARDEN vs. ZURICH INSURANCE GROUP | COUNTRY GARDEN vs. AUTO TRADER ADR | COUNTRY GARDEN vs. Singapore Reinsurance | COUNTRY GARDEN vs. Zurich Insurance Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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