Correlation Between GREENX METALS and China Resources
Can any of the company-specific risk be diversified away by investing in both GREENX METALS 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 GREENX METALS and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GREENX METALS LTD and China Resources Beer, you can compare the effects of market volatilities on GREENX METALS 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 GREENX METALS with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GREENX METALS and China Resources.
Diversification Opportunities for GREENX METALS and China Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GREENX and China is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GREENX METALS LTD 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 GREENX METALS 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 GREENX METALS LTD 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 GREENX METALS i.e., GREENX METALS and China Resources go up and down completely randomly.
Pair Corralation between GREENX METALS and China Resources
Assuming the 90 days trading horizon GREENX METALS LTD is expected to generate 1.64 times more return on investment than China Resources. However, GREENX METALS is 1.64 times more volatile than China Resources Beer. It trades about 0.02 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.01 per unit of risk. If you would invest 37.00 in GREENX METALS LTD on August 29, 2024 and sell it today you would earn a total of 0.00 from holding GREENX METALS LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GREENX METALS LTD vs. China Resources Beer
Performance |
| Timeline |
| GREENX METALS LTD |
| China Resources Beer |
GREENX METALS and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GREENX METALS and China Resources
The main advantage of trading using opposite GREENX METALS and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENX METALS 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.| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. SIVERS SEMICONDUCTORS AB | GREENX METALS vs. Talanx AG |
| China Resources vs. Molson Coors Brewing | China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. SIVERS SEMICONDUCTORS AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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