Correlation Between Daiwa House and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both Daiwa House 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 Daiwa House and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daiwa House Industry and CHINA VANKE TD, you can compare the effects of market volatilities on Daiwa House 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 Daiwa House with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daiwa House and CHINA VANKE.
Diversification Opportunities for Daiwa House and CHINA VANKE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daiwa and CHINA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Daiwa House Industry 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 Daiwa House 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 Daiwa House Industry 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 Daiwa House i.e., Daiwa House and CHINA VANKE go up and down completely randomly.
Pair Corralation between Daiwa House and CHINA VANKE
Assuming the 90 days horizon Daiwa House is expected to generate 1.71 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, Daiwa House Industry is 5.76 times less risky than CHINA VANKE. It trades about 0.04 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 185.00 in CHINA VANKE TD on September 23, 2024 and sell it today you would lose (118.00) from holding CHINA VANKE TD or give up 63.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Daiwa House Industry vs. CHINA VANKE TD
Performance |
Timeline |
Daiwa House Industry |
CHINA VANKE TD |
Daiwa House and CHINA VANKE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Daiwa House and CHINA VANKE
The main advantage of trading using opposite Daiwa House and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daiwa House 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.Daiwa House vs. Sun Hung Kai | Daiwa House vs. China Overseas Land | Daiwa House vs. Longfor Group Holdings | Daiwa House vs. Mitsui Fudosan Co |
CHINA VANKE vs. Sun Hung Kai | CHINA VANKE vs. China Overseas Land | CHINA VANKE vs. Longfor Group Holdings | CHINA VANKE vs. Mitsui Fudosan Co |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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