Correlation Between China Overseas and Agile Group

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

By analyzing existing cross correlation between China Overseas Land and Agile Group Holdings, you can compare the effects of market volatilities on China Overseas and Agile Group 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 Overseas with a short position of Agile Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Overseas and Agile Group.

Diversification Opportunities for China Overseas and Agile Group

-0.36

Correlation Coefficient

China Overseas  Agile Group

Very good diversification

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

Pair Corralation between China Overseas and Agile Group

Assuming the 90 days horizon China Overseas Land is expected to generate 0.71 times more return on investment than Agile Group. However, China Overseas Land is 1.41 times less risky than Agile Group. It trades about 0.05 of its potential returns per unit of risk. Agile Group Holdings is currently generating about -0.06 per unit of risk. If you would invest  869.00  in China Overseas Land on December 2, 2024 and sell it today you would earn a total of  53.00  from holding China Overseas Land or generate 6.1% return on investment over 90 days.

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

China Overseas Land  vs.  Agile Group Holdings

China Overseas Land

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Overseas Land are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, China Overseas may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Agile Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agile Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with China Overseas and Agile Group

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

The idea behind China Overseas Land and Agile Group Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.