Correlation Between Superior Plus and China Resources
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and China Resources Land, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and China Resources.
Diversification Opportunities for Superior Plus and China Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Superior and China is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and Superior Plus 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 Superior Plus Corp 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 Land has no effect on the direction of Superior Plus i.e., Superior Plus and China Resources go up and down completely randomly.
Pair Corralation between Superior Plus and China Resources
Assuming the 90 days horizon Superior Plus is expected to generate 1.07 times less return on investment than China Resources. In addition to that, Superior Plus is 1.1 times more volatile than China Resources Land. It trades about 0.06 of its total potential returns per unit of risk. China Resources Land is currently generating about 0.07 per unit of volatility. If you would invest 274.00 in China Resources Land on October 29, 2024 and sell it today you would earn a total of 6.00 from holding China Resources Land or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. China Resources Land
Performance |
| Timeline |
| Superior Plus Corp |
| China Resources Land |
Superior Plus and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and China Resources
The main advantage of trading using opposite Superior Plus and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. G8 EDUCATION | Superior Plus vs. China Communications Services | Superior Plus vs. Spirent Communications plc | Superior Plus vs. TELECOM ITALIA |
| China Resources vs. PEPTONIC MEDICAL | China Resources vs. Diamyd Medical AB | China Resources vs. Apollo Investment Corp | China Resources vs. CompuGroup Medical SE |
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
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |