Correlation Between China Vanke and Qingdao Foods

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both China Vanke and Qingdao Foods 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 China Vanke and Qingdao Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Vanke Co and Qingdao Foods Co, you can compare the effects of market volatilities on China Vanke and Qingdao Foods 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 China Vanke with a short position of Qingdao Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and Qingdao Foods.

Diversification Opportunities for China Vanke and Qingdao Foods

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between China and Qingdao is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and Qingdao Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Foods and China Vanke 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 China Vanke Co are associated (or correlated) with Qingdao Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Foods has no effect on the direction of China Vanke i.e., China Vanke and Qingdao Foods go up and down completely randomly.

Pair Corralation between China Vanke and Qingdao Foods

Assuming the 90 days trading horizon China Vanke Co is expected to under-perform the Qingdao Foods. In addition to that, China Vanke is 1.01 times more volatile than Qingdao Foods Co. It trades about -0.06 of its total potential returns per unit of risk. Qingdao Foods Co is currently generating about 0.01 per unit of volatility. If you would invest  1,367  in Qingdao Foods Co on October 5, 2024 and sell it today you would lose (46.00) from holding Qingdao Foods Co or give up 3.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.67%
ValuesDaily Returns

China Vanke Co  vs.  Qingdao Foods Co

 Performance 
       Timeline  
China Vanke 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days China Vanke Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Qingdao Foods 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Qingdao Foods Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Qingdao Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

China Vanke and Qingdao Foods Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Vanke and Qingdao Foods

The main advantage of trading using opposite China Vanke and Qingdao Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Vanke position performs unexpectedly, Qingdao Foods 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 Qingdao Foods will offset losses from the drop in Qingdao Foods' long position.
The idea behind China Vanke Co and Qingdao Foods Co 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Stocks Directory
Find actively traded stocks across global markets
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges