Correlation Between Calissio Resources and China Overseas

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

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

Diversification Opportunities for Calissio Resources and China Overseas

-0.58

Correlation Coefficient

Calissio Resources  China Overseas

Excellent diversification

The 3 months correlation between Calissio and China is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Calissio Resources Group and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land and Calissio Resources 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 Calissio Resources Group are associated (or correlated) with China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of Calissio Resources i.e., Calissio Resources and China Overseas go up and down completely randomly.

Pair Corralation between Calissio Resources and China Overseas

Given the investment horizon of 90 days Calissio Resources Group is expected to under-perform the China Overseas. In addition to that, Calissio Resources is 1.79 times more volatile than China Overseas Land. It trades about -0.07 of its total potential returns per unit of risk. China Overseas Land is currently generating about 0.07 per unit of volatility. If you would invest  145.00  in China Overseas Land on September 3, 2024 and sell it today you would earn a total of  20.00  from holding China Overseas Land or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.31%
Values	Daily Returns

Calissio Resources Group  vs.  China Overseas Land

Calissio Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calissio Resources Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

China Overseas Land

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in China Overseas Land are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, China Overseas reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calissio Resources and China Overseas

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

The idea behind Calissio Resources Group and China Overseas Land 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.