Correlation Between Country Garden and Longfor Properties
Can any of the company-specific risk be diversified away by investing in both Country Garden and Longfor Properties 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 Longfor Properties 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 Longfor Properties Co, you can compare the effects of market volatilities on Country Garden and Longfor Properties 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 Longfor Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and Longfor Properties.
Diversification Opportunities for Country Garden and Longfor Properties
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Country and Longfor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Longfor Properties Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longfor Properties 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 Longfor Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longfor Properties has no effect on the direction of Country Garden i.e., Country Garden and Longfor Properties go up and down completely randomly.
Pair Corralation between Country Garden and Longfor Properties
If you would invest 1,423 in Longfor Properties Co on December 1, 2024 and sell it today you would lose (35.00) from holding Longfor Properties Co or give up 2.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Country Garden Holdings vs. Longfor Properties Co
Performance |
Timeline |
Country Garden Holdings |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Longfor Properties |
Country Garden and Longfor Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Country Garden and Longfor Properties
The main advantage of trading using opposite Country Garden and Longfor Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, Longfor Properties 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 Longfor Properties will offset losses from the drop in Longfor Properties' long position.Country Garden vs. Longfor Properties Co | Country Garden vs. China Overseas Land | Country Garden vs. China Resources Land | Country Garden vs. Anhui Conch Cement |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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