Correlation Between International Land and Country Garden

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

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

Diversification Opportunities for International Land and Country Garden

0.11

Correlation Coefficient

International Land  Country Garden

Average diversification

The 3 months correlation between International and Country is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding International Land Alliance 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 International Land 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 International Land Alliance 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 International Land i.e., International Land and Country Garden go up and down completely randomly.

Pair Corralation between International Land and Country Garden

Given the investment horizon of 90 days International Land Alliance is expected to generate 1.63 times more return on investment than Country Garden. However, International Land is 1.63 times more volatile than Country Garden Holdings. It trades about 0.09 of its potential returns per unit of risk. Country Garden Holdings is currently generating about -0.12 per unit of risk. If you would invest  9.00  in International Land Alliance on October 7, 2024 and sell it today you would earn a total of  3.00  from holding International Land Alliance or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	47.62%
Values	Daily Returns

International Land Alliance  vs.  Country Garden Holdings

International Land

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Land Alliance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, International Land disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with International Land and Country Garden

The main advantage of trading using opposite International Land and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Land 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 International Land Alliance 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.