Correlation Between CHINA VANKE and ENTERGY -

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

By analyzing existing cross correlation between CHINA VANKE TD and ENTERGY Dusseldorf, you can compare the effects of market volatilities on CHINA VANKE and ENTERGY - 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 ENTERGY -. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA VANKE and ENTERGY -.

Diversification Opportunities for CHINA VANKE and ENTERGY -

-0.36

Correlation Coefficient

CHINA VANKE  ENTERGY -

Very good diversification

The 3 months correlation between CHINA and ENTERGY is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CHINA VANKE TD and ENTERGY Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERGY Dusseldorf 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 TD are associated (or correlated) with ENTERGY -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERGY Dusseldorf has no effect on the direction of CHINA VANKE i.e., CHINA VANKE and ENTERGY - go up and down completely randomly.

Pair Corralation between CHINA VANKE and ENTERGY -

Assuming the 90 days horizon CHINA VANKE TD is expected to under-perform the ENTERGY -. In addition to that, CHINA VANKE is 2.33 times more volatile than ENTERGY Dusseldorf. It trades about -0.17 of its total potential returns per unit of risk. ENTERGY Dusseldorf is currently generating about 0.15 per unit of volatility. If you would invest  5,798  in ENTERGY Dusseldorf on October 2, 2024 and sell it today you would earn a total of  1,352  from holding ENTERGY Dusseldorf or generate 23.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CHINA VANKE TD  vs.  ENTERGY Dusseldorf

CHINA VANKE TD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA VANKE TD 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.

ENTERGY Dusseldorf

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ENTERGY Dusseldorf are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ENTERGY - unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHINA VANKE and ENTERGY -

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

The idea behind CHINA VANKE TD and ENTERGY Dusseldorf 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.