Correlation Between Country Garden and Country Garden

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

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

Diversification Opportunities for Country Garden and Country Garden

0.29

Correlation Coefficient

Country Garden  Country Garden

Modest diversification

The 3 months correlation between Country and Country is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Country Garden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Holdings and Country Garden 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 Country Garden Holdings are associated (or correlated) with Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Holdings has no effect on the direction of Country Garden i.e., Country Garden and Country Garden go up and down completely randomly.

Pair Corralation between Country Garden and Country Garden

If you would invest  20.00  in Country Garden Holdings on September 4, 2024 and sell it today you would lose (2.00) from holding Country Garden Holdings or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Country Garden Holdings  vs.  Country Garden Holdings

Country Garden Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Country Garden Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Country Garden is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Country Garden Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Country Garden Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Country Garden reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Country Garden and Country Garden

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

The idea behind Country Garden Holdings and Country Garden 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.