Correlation Between Carson Development and Sino Land

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

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

Diversification Opportunities for Carson Development and Sino Land

0.0

Correlation Coefficient

Carson Development  Sino Land

Pay attention - limited upside

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

Pair Corralation between Carson Development and Sino Land

If you would invest  117.00  in Sino Land on March 18, 2024 and sell it today you would earn a total of  0.00  from holding Sino Land or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Carson Development  vs.  Sino Land

Carson Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carson Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Carson Development is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Sino Land

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Carson Development and Sino Land

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

The idea behind Carson Development and Sino Land 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.