Correlation Between TRAVEL LEISURE and CHINA VANKE

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

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and CHINA VANKE TD, you can compare the effects of market volatilities on TRAVEL LEISURE and CHINA VANKE 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 TRAVEL LEISURE with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL LEISURE and CHINA VANKE.

Diversification Opportunities for TRAVEL LEISURE and CHINA VANKE

0.0

Correlation Coefficient

TRAVEL LEISURE  CHINA VANKE

Pay attention - limited upside

The 3 months correlation between TRAVEL and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and TRAVEL LEISURE 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 TRAVEL LEISURE DL 01 are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of TRAVEL LEISURE i.e., TRAVEL LEISURE and CHINA VANKE go up and down completely randomly.

Pair Corralation between TRAVEL LEISURE and CHINA VANKE

If you would invest  4,337  in TRAVEL LEISURE DL 01 on October 26, 2024 and sell it today you would earn a total of  763.00  from holding TRAVEL LEISURE DL 01 or generate 17.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TRAVEL LEISURE DL 01  vs.  CHINA VANKE TD

TRAVEL LEISURE DL

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL LEISURE reported solid returns over the last few months and may actually be approaching a breakup point.

CHINA VANKE TD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA VANKE TD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CHINA VANKE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TRAVEL LEISURE and CHINA VANKE

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

The idea behind TRAVEL LEISURE DL 01 and CHINA VANKE TD 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.