Correlation Between NioCorp Developments and Country Garden
Can any of the company-specific risk be diversified away by investing in both NioCorp Developments 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 NioCorp Developments and Country Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NioCorp Developments Ltd and Country Garden Holdings, you can compare the effects of market volatilities on NioCorp Developments 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 NioCorp Developments with a short position of Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of NioCorp Developments and Country Garden.
Diversification Opportunities for NioCorp Developments and Country Garden
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NioCorp and Country is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NioCorp Developments Ltd 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 NioCorp Developments 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 NioCorp Developments Ltd 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 NioCorp Developments i.e., NioCorp Developments and Country Garden go up and down completely randomly.
Pair Corralation between NioCorp Developments and Country Garden
Allowing for the 90-day total investment horizon NioCorp Developments Ltd is expected to generate 1.63 times more return on investment than Country Garden. However, NioCorp Developments is 1.63 times more volatile than Country Garden Holdings. It trades about 0.04 of its potential returns per unit of risk. Country Garden Holdings is currently generating about 0.06 per unit of risk. If you would invest 78.00 in NioCorp Developments Ltd on August 31, 2024 and sell it today you would earn a total of 55.00 from holding NioCorp Developments Ltd or generate 70.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.54% |
| Values | Daily Returns |
NioCorp Developments Ltd vs. Country Garden Holdings
Performance |
| Timeline |
| NioCorp Developments |
| Country Garden Holdings |
NioCorp Developments and Country Garden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NioCorp Developments and Country Garden
The main advantage of trading using opposite NioCorp Developments and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NioCorp Developments 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.| NioCorp Developments vs. FTAI Aviation Ltd | NioCorp Developments vs. United Rentals | NioCorp Developments vs. Brunswick | NioCorp Developments vs. Wabash National |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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