Correlation Between SEAZEN GROUP and China Resources
Can any of the company-specific risk be diversified away by investing in both SEAZEN GROUP 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 SEAZEN GROUP and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEAZEN GROUP LTD and China Resources Land, you can compare the effects of market volatilities on SEAZEN GROUP 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 SEAZEN GROUP with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEAZEN GROUP and China Resources.
Diversification Opportunities for SEAZEN GROUP and China Resources
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SEAZEN and China is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SEAZEN GROUP LTD 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 SEAZEN GROUP 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 SEAZEN GROUP LTD 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 SEAZEN GROUP i.e., SEAZEN GROUP and China Resources go up and down completely randomly.
Pair Corralation between SEAZEN GROUP and China Resources
Assuming the 90 days trading horizon SEAZEN GROUP is expected to generate 7.11 times less return on investment than China Resources. In addition to that, SEAZEN GROUP is 1.1 times more volatile than China Resources Land. It trades about 0.01 of its total potential returns per unit of risk. China Resources Land is currently generating about 0.05 per unit of volatility. If you would invest 135.00 in China Resources Land on September 23, 2024 and sell it today you would earn a total of 135.00 from holding China Resources Land or generate 100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SEAZEN GROUP LTD vs. China Resources Land
Performance |
Timeline |
SEAZEN GROUP LTD |
China Resources Land |
SEAZEN GROUP and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SEAZEN GROUP and China Resources
The main advantage of trading using opposite SEAZEN GROUP and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEAZEN GROUP 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.SEAZEN GROUP vs. China Resources Land | SEAZEN GROUP vs. DEUTSCHE WOHNEN ADRS12 | SEAZEN GROUP vs. CTP NV EO | SEAZEN GROUP vs. Atrium Ljungberg AB |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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