Correlation Between SILVER BULLET and China Resources
Can any of the company-specific risk be diversified away by investing in both SILVER BULLET 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 SILVER BULLET and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SILVER BULLET DATA and China Resources Beer, you can compare the effects of market volatilities on SILVER BULLET 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 SILVER BULLET with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SILVER BULLET and China Resources.
Diversification Opportunities for SILVER BULLET and China Resources
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SILVER and China is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding SILVER BULLET DATA 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 SILVER BULLET 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 SILVER BULLET DATA 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 SILVER BULLET i.e., SILVER BULLET and China Resources go up and down completely randomly.
Pair Corralation between SILVER BULLET and China Resources
Assuming the 90 days horizon SILVER BULLET DATA is expected to generate 0.28 times more return on investment than China Resources. However, SILVER BULLET DATA is 3.54 times less risky than China Resources. It trades about -0.24 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.23 per unit of risk. If you would invest 72.00 in SILVER BULLET DATA on October 17, 2024 and sell it today you would lose (2.00) from holding SILVER BULLET DATA or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
SILVER BULLET DATA vs. China Resources Beer
Performance |
| Timeline |
| SILVER BULLET DATA |
| China Resources Beer |
SILVER BULLET and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SILVER BULLET and China Resources
The main advantage of trading using opposite SILVER BULLET and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SILVER BULLET 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.| SILVER BULLET vs. GAMING FAC SA | SILVER BULLET vs. PENN NATL GAMING | SILVER BULLET vs. GAMESTOP | SILVER BULLET vs. Focus Home Interactive |
| China Resources vs. Automatic Data Processing | China Resources vs. Molina Healthcare | China Resources vs. US Physical Therapy | China Resources vs. SILVER BULLET DATA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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