Correlation Between TROPHY GAMES and China Resources
Can any of the company-specific risk be diversified away by investing in both TROPHY GAMES and China Resources 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 TROPHY GAMES and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TROPHY GAMES DEV and China Resources Beer, you can compare the effects of market volatilities on TROPHY GAMES and China Resources 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 TROPHY GAMES with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of TROPHY GAMES and China Resources.
Diversification Opportunities for TROPHY GAMES and China Resources
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between TROPHY and China is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TROPHY GAMES DEV and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer and TROPHY GAMES 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 TROPHY GAMES DEV are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of TROPHY GAMES i.e., TROPHY GAMES and China Resources go up and down completely randomly.
Pair Corralation between TROPHY GAMES and China Resources
Assuming the 90 days horizon TROPHY GAMES DEV is expected to generate 0.66 times more return on investment than China Resources. However, TROPHY GAMES DEV is 1.52 times less risky than China Resources. It trades about -0.11 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.08 per unit of risk. If you would invest 98.00 in TROPHY GAMES DEV on September 4, 2024 and sell it today you would lose (7.00) from holding TROPHY GAMES DEV or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TROPHY GAMES DEV vs. China Resources Beer
Performance |
| Timeline |
| TROPHY GAMES DEV |
| China Resources Beer |
TROPHY GAMES and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TROPHY GAMES and China Resources
The main advantage of trading using opposite TROPHY GAMES and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TROPHY GAMES position performs unexpectedly, China Resources 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 Resources will offset losses from the drop in China Resources' long position.| TROPHY GAMES vs. ON SEMICONDUCTOR | TROPHY GAMES vs. MAGNUM MINING EXP | TROPHY GAMES vs. AOI Electronics Co | TROPHY GAMES vs. Richardson Electronics |
| China Resources vs. HF SINCLAIR P | China Resources vs. PKSHA TECHNOLOGY INC | China Resources vs. WIZZ AIR HLDGUNSPADR4 | China Resources vs. Alaska Air Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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