Correlation Between Alphabet and China Green

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alphabet and China Green 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 Alphabet and China Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and China Green Agriculture, you can compare the effects of market volatilities on Alphabet and China Green 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 Alphabet with a short position of China Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and China Green.

Diversification Opportunities for Alphabet and China Green

0.15
  Correlation Coefficient

Average diversification

The 3 months correlation between Alphabet and China is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and China Green Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Green Agriculture and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with China Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Green Agriculture has no effect on the direction of Alphabet i.e., Alphabet and China Green go up and down completely randomly.

Pair Corralation between Alphabet and China Green

Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 0.29 times more return on investment than China Green. However, Alphabet Inc Class C is 3.39 times less risky than China Green. It trades about 0.07 of its potential returns per unit of risk. China Green Agriculture is currently generating about 0.0 per unit of risk. If you would invest  9,562  in Alphabet Inc Class C on September 3, 2024 and sell it today you would earn a total of  7,487  from holding Alphabet Inc Class C or generate 78.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy98.38%
ValuesDaily Returns

Alphabet Inc Class C  vs.  China Green Agriculture

 Performance 
       Timeline  
Alphabet Class C 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class C are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Alphabet may actually be approaching a critical reversion point that can send shares even higher in January 2025.
China Green Agriculture 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in China Green Agriculture are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, China Green sustained solid returns over the last few months and may actually be approaching a breakup point.

Alphabet and China Green Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alphabet and China Green

The main advantage of trading using opposite Alphabet and China Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, China Green 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 Green will offset losses from the drop in China Green's long position.
The idea behind Alphabet Inc Class C and China Green Agriculture 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Volatility Analysis
Get historical volatility and risk analysis based on latest market data