Correlation Between RIV Capital and China Infrastructure

Can any of the company-specific risk be diversified away by investing in both RIV Capital and China Infrastructure 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 RIV Capital and China Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RIV Capital and China Infrastructure Construction, you can compare the effects of market volatilities on RIV Capital and China Infrastructure 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 RIV Capital with a short position of China Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of RIV Capital and China Infrastructure.

Diversification Opportunities for RIV Capital and China Infrastructure

0.31

Correlation Coefficient

RIV Capital  China Infrastructure

Weak diversification

The 3 months correlation between RIV and China is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding RIV Capital and China Infrastructure Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Infrastructure and RIV Capital 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 RIV Capital are associated (or correlated) with China Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Infrastructure has no effect on the direction of RIV Capital i.e., RIV Capital and China Infrastructure go up and down completely randomly.

Pair Corralation between RIV Capital and China Infrastructure

If you would invest  0.04  in China Infrastructure Construction on September 20, 2024 and sell it today you would earn a total of  0.00  from holding China Infrastructure Construction or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

RIV Capital  vs.  China Infrastructure Construct

RIV Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RIV Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

China Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Infrastructure Construction has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, China Infrastructure is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with RIV Capital and China Infrastructure

The main advantage of trading using opposite RIV Capital and China Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RIV Capital position performs unexpectedly, China Infrastructure 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 Infrastructure will offset losses from the drop in China Infrastructure's long position.

The idea behind RIV Capital and China Infrastructure Construction pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.