Correlation Between Greenland Hong and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both Greenland Hong and TIMES CHINA 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 Greenland Hong and TIMES CHINA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenland Hong Kong and TIMES CHINA HLDGS, you can compare the effects of market volatilities on Greenland Hong and TIMES CHINA 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 Greenland Hong with a short position of TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenland Hong and TIMES CHINA.
Diversification Opportunities for Greenland Hong and TIMES CHINA
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Greenland and TIMES is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Greenland Hong Kong and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS and Greenland Hong 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 Greenland Hong Kong are associated (or correlated) with TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of Greenland Hong i.e., Greenland Hong and TIMES CHINA go up and down completely randomly.
Pair Corralation between Greenland Hong and TIMES CHINA
Assuming the 90 days trading horizon Greenland Hong Kong is expected to generate 0.99 times more return on investment than TIMES CHINA. However, Greenland Hong Kong is 1.01 times less risky than TIMES CHINA. It trades about 0.11 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.07 per unit of risk. If you would invest 2.70 in Greenland Hong Kong on September 4, 2024 and sell it today you would earn a total of 0.35 from holding Greenland Hong Kong or generate 12.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenland Hong Kong vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| Greenland Hong Kong |
| TIMES CHINA HLDGS |
Greenland Hong and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenland Hong and TIMES CHINA
The main advantage of trading using opposite Greenland Hong and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenland Hong position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| Greenland Hong vs. PT Indofood Sukses | Greenland Hong vs. Lery Seafood Group | Greenland Hong vs. Dairy Farm International | Greenland Hong vs. AUSTEVOLL SEAFOOD |
| TIMES CHINA vs. Eidesvik Offshore ASA | TIMES CHINA vs. Iridium Communications | TIMES CHINA vs. Summit Hotel Properties | TIMES CHINA vs. SIEM OFFSHORE NEW |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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