Correlation Between CITY OFFICE and China Resources
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and China Resources Beer, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and China Resources.
Diversification Opportunities for CITY OFFICE and China Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CITY and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT 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 CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and China Resources go up and down completely randomly.
Pair Corralation between CITY OFFICE and China Resources
Assuming the 90 days horizon CITY OFFICE REIT is expected to under-perform the China Resources. In addition to that, CITY OFFICE is 1.04 times more volatile than China Resources Beer. It trades about -0.1 of its total potential returns per unit of risk. China Resources Beer is currently generating about 0.0 per unit of volatility. If you would invest 296.00 in China Resources Beer on November 2, 2024 and sell it today you would lose (2.00) from holding China Resources Beer or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CITY OFFICE REIT vs. China Resources Beer
Performance |
| Timeline |
| CITY OFFICE REIT |
| China Resources Beer |
CITY OFFICE and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CITY OFFICE and China Resources
The main advantage of trading using opposite CITY OFFICE and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.| CITY OFFICE vs. Coeur Mining | CITY OFFICE vs. ATOSS SOFTWARE | CITY OFFICE vs. Easy Software AG | CITY OFFICE vs. ARDAGH METAL PACDL 0001 |
| China Resources vs. NEWELL RUBBERMAID | China Resources vs. Fukuyama Transporting Co | China Resources vs. SANOK RUBBER ZY | China Resources vs. Eagle Materials |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |