Correlation Between Wharf Holdings and Guangzhou
Can any of the company-specific risk be diversified away by investing in both Wharf Holdings and Guangzhou 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 Wharf Holdings and Guangzhou into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wharf Holdings and Guangzhou RF Properties, you can compare the effects of market volatilities on Wharf Holdings and Guangzhou 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 Wharf Holdings with a short position of Guangzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wharf Holdings and Guangzhou.
Diversification Opportunities for Wharf Holdings and Guangzhou
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wharf and Guangzhou is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Wharf Holdings and Guangzhou RF Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou RF Properties and Wharf Holdings 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 Wharf Holdings are associated (or correlated) with Guangzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou RF Properties has no effect on the direction of Wharf Holdings i.e., Wharf Holdings and Guangzhou go up and down completely randomly.
Pair Corralation between Wharf Holdings and Guangzhou
If you would invest 23.00 in Guangzhou RF Properties on September 25, 2024 and sell it today you would earn a total of 0.00 from holding Guangzhou RF Properties or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wharf Holdings vs. Guangzhou RF Properties
Performance |
Timeline |
Wharf Holdings |
Guangzhou RF Properties |
Wharf Holdings and Guangzhou Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wharf Holdings and Guangzhou
The main advantage of trading using opposite Wharf Holdings and Guangzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wharf Holdings position performs unexpectedly, Guangzhou 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 Guangzhou will offset losses from the drop in Guangzhou's long position.Wharf Holdings vs. Hong Kong Land | Wharf Holdings vs. Holiday Island Holdings | Wharf Holdings vs. Sun Hung Kai | Wharf Holdings vs. Country Garden Holdings |
Guangzhou vs. Hong Kong Land | Guangzhou vs. Wharf Holdings | Guangzhou vs. Holiday Island Holdings | Guangzhou vs. Sun Hung Kai |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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