Correlation Between North American and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both North American and CHINA VANKE 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 North American and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and CHINA VANKE TD, you can compare the effects of market volatilities on North American and CHINA VANKE 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 North American with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and CHINA VANKE.
Diversification Opportunities for North American and CHINA VANKE
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between North and CHINA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and North American 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 North American Construction are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of North American i.e., North American and CHINA VANKE go up and down completely randomly.
Pair Corralation between North American and CHINA VANKE
Assuming the 90 days horizon North American is expected to generate 3.91 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, North American Construction is 3.76 times less risky than CHINA VANKE. It trades about 0.13 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 45.00 in CHINA VANKE TD on September 12, 2024 and sell it today you would earn a total of 36.00 from holding CHINA VANKE TD or generate 80.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. CHINA VANKE TD
Performance |
| Timeline |
| North American Const |
| CHINA VANKE TD |
North American and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and CHINA VANKE
The main advantage of trading using opposite North American and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, CHINA VANKE 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 VANKE will offset losses from the drop in CHINA VANKE's long position.| North American vs. Tenaris SA | North American vs. NOV Inc | North American vs. Superior Plus Corp | North American vs. SIVERS SEMICONDUCTORS AB |
| CHINA VANKE vs. TRAINLINE PLC LS | CHINA VANKE vs. TEXAS ROADHOUSE | CHINA VANKE vs. COPLAND ROAD CAPITAL | CHINA VANKE vs. Columbia Sportswear |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |