Correlation Between Country Garden and Alphabet
Can any of the company-specific risk be diversified away by investing in both Country Garden and Alphabet 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 Alphabet 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 Alphabet Inc Class C, you can compare the effects of market volatilities on Country Garden and Alphabet 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 Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Country Garden and Alphabet.
Diversification Opportunities for Country Garden and Alphabet
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Country and Alphabet is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Country Garden Holdings and Alphabet Inc Class C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet Class C 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 Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet Class C has no effect on the direction of Country Garden i.e., Country Garden and Alphabet go up and down completely randomly.
Pair Corralation between Country Garden and Alphabet
Assuming the 90 days horizon Country Garden Holdings is expected to generate 22.39 times more return on investment than Alphabet. However, Country Garden is 22.39 times more volatile than Alphabet Inc Class C. It trades about 0.15 of its potential returns per unit of risk. Alphabet Inc Class C is currently generating about 0.22 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Country Garden Holdings vs. Alphabet Inc Class C
Performance |
| Timeline |
| Country Garden Holdings |
| Alphabet Class C |
Country Garden and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Country Garden and Alphabet
The main advantage of trading using opposite Country Garden and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Country Garden position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| Country Garden vs. Country Garden Holdings | Country Garden vs. Sun Hung Kai | Country Garden vs. Sino Land Co | Country Garden 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |