Correlation Between REDSUN PROPERTIES and China Resources
Can any of the company-specific risk be diversified away by investing in both REDSUN PROPERTIES and China Resources 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 REDSUN PROPERTIES and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REDSUN PROPERTIES GROUP and China Resources Land, you can compare the effects of market volatilities on REDSUN PROPERTIES and China Resources 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 REDSUN PROPERTIES with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of REDSUN PROPERTIES and China Resources.
Diversification Opportunities for REDSUN PROPERTIES and China Resources
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REDSUN and China is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding REDSUN PROPERTIES GROUP and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and REDSUN PROPERTIES 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 REDSUN PROPERTIES GROUP are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of REDSUN PROPERTIES i.e., REDSUN PROPERTIES and China Resources go up and down completely randomly.
Pair Corralation between REDSUN PROPERTIES and China Resources
Assuming the 90 days horizon REDSUN PROPERTIES GROUP is expected to generate 5.22 times more return on investment than China Resources. However, REDSUN PROPERTIES is 5.22 times more volatile than China Resources Land. It trades about 0.06 of its potential returns per unit of risk. China Resources Land is currently generating about 0.05 per unit of risk. If you would invest 5.50 in REDSUN PROPERTIES GROUP on September 23, 2024 and sell it today you would lose (5.25) from holding REDSUN PROPERTIES GROUP or give up 95.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
REDSUN PROPERTIES GROUP vs. China Resources Land
Performance |
Timeline |
REDSUN PROPERTIES |
China Resources Land |
REDSUN PROPERTIES and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with REDSUN PROPERTIES and China Resources
The main advantage of trading using opposite REDSUN PROPERTIES and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REDSUN PROPERTIES position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' long position.REDSUN PROPERTIES vs. United Airlines Holdings | REDSUN PROPERTIES vs. JD SPORTS FASH | REDSUN PROPERTIES vs. Gaztransport Technigaz SA | REDSUN PROPERTIES vs. United Breweries Co |
China Resources vs. DEUTSCHE WOHNEN ADRS12 | China Resources vs. CTP NV EO | China Resources vs. SEAZEN GROUP LTD | China Resources vs. Atrium Ljungberg AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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