Correlation Between Vonovia SE and Country Garden
Can any of the company-specific risk be diversified away by investing in both Vonovia SE and Country Garden 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 Vonovia SE and Country Garden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vonovia SE ADR and Country Garden Services, you can compare the effects of market volatilities on Vonovia SE and Country Garden 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 Vonovia SE with a short position of Country Garden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vonovia SE and Country Garden.
Diversification Opportunities for Vonovia SE and Country Garden
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vonovia and Country is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vonovia SE ADR and Country Garden Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Garden Services and Vonovia SE 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 Vonovia SE ADR are associated (or correlated) with Country Garden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Garden Services has no effect on the direction of Vonovia SE i.e., Vonovia SE and Country Garden go up and down completely randomly.
Pair Corralation between Vonovia SE and Country Garden
Assuming the 90 days horizon Vonovia SE ADR is expected to generate 0.3 times more return on investment than Country Garden. However, Vonovia SE ADR is 3.31 times less risky than Country Garden. It trades about -0.31 of its potential returns per unit of risk. Country Garden Services is currently generating about -0.24 per unit of risk. If you would invest 1,490 in Vonovia SE ADR on January 26, 2024 and sell it today you would lose (137.50) from holding Vonovia SE ADR or give up 9.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Vonovia SE ADR vs. Country Garden Services
Performance |
Timeline |
Vonovia SE ADR |
Country Garden Services |
Vonovia SE and Country Garden Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vonovia SE and Country Garden
The main advantage of trading using opposite Vonovia SE and Country Garden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vonovia SE position performs unexpectedly, Country Garden 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 Country Garden will offset losses from the drop in Country Garden's long position.Vonovia SE vs. IRSA Inversiones Y | Vonovia SE vs. Anywhere Real Estate | Vonovia SE vs. Newmark Group | Vonovia SE vs. New York City |
Country Garden vs. IRSA Inversiones Y | Country Garden vs. Anywhere Real Estate | Country Garden vs. Newmark Group | Country Garden 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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