Correlation Between China Vanke and Harbor Custom

Can any of the company-specific risk be diversified away by investing in both China Vanke and Harbor Custom 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 Harbor Custom 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 Harbor Custom Development, you can compare the effects of market volatilities on China Vanke and Harbor Custom 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 Harbor Custom. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Vanke and Harbor Custom.

Diversification Opportunities for China Vanke and Harbor Custom

0.0

Correlation Coefficient

China Vanke  Harbor Custom

Pay attention - limited upside

The 3 months correlation between China and Harbor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Vanke Co and Harbor Custom Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Custom Development 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 Harbor Custom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Custom Development has no effect on the direction of China Vanke i.e., China Vanke and Harbor Custom go up and down completely randomly.

Pair Corralation between China Vanke and Harbor Custom

If you would invest  75.00  in China Vanke Co on December 20, 2024 and sell it today you would lose (1.00) from holding China Vanke Co or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

China Vanke Co  vs.  Harbor Custom Development

China Vanke

Risk-Adjusted Performance

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 nearly stable forward-looking signals, China Vanke is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Harbor Custom Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days Harbor Custom Development has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Harbor Custom is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with China Vanke and Harbor Custom

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

The idea behind China Vanke Co and Harbor Custom Development 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.