Correlation Between Country Garden and Aroundtown
Can any of the company-specific risk be diversified away by investing in both Country Garden and Aroundtown 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 Aroundtown 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 Aroundtown SA, you can compare the effects of market volatilities on Country Garden and Aroundtown 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 Aroundtown. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and Aroundtown.
Diversification Opportunities for Country Garden and Aroundtown
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Country and Aroundtown is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Aroundtown SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aroundtown SA 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 Aroundtown. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aroundtown SA has no effect on the direction of Country Garden i.e., Country Garden and Aroundtown go up and down completely randomly.
Pair Corralation between Country Garden and Aroundtown
Assuming the 90 days horizon Country Garden Holdings is expected to generate 6.72 times more return on investment than Aroundtown. However, Country Garden is 6.72 times more volatile than Aroundtown SA. It trades about 0.15 of its potential returns per unit of risk. Aroundtown SA is currently generating about -0.01 per unit of risk. If you would invest 7.00 in Country Garden Holdings on January 25, 2024 and sell it today you would earn a total of 3.00 from holding Country Garden Holdings or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Country Garden Holdings vs. Aroundtown SA
Performance |
| Timeline |
| Country Garden Holdings |
| Aroundtown SA |
Country Garden and Aroundtown Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Garden and Aroundtown
The main advantage of trading using opposite Country Garden and Aroundtown positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, Aroundtown 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 Aroundtown will offset losses from the drop in Aroundtown's long position.| Country Garden vs. Where Food Comes | Country Garden vs. Kura Sushi USA | Country Garden vs. LuxUrban Hotels 1300 | Country Garden vs. BJs Restaurants |
| Aroundtown vs. IRSA Inversiones Y | Aroundtown vs. Anywhere Real Estate | Aroundtown vs. Newmark Group | Aroundtown vs. New York City |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |