Correlation Between EMBARK EDUCATION and China Resources
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION 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 EMBARK EDUCATION and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and China Resources Beer, you can compare the effects of market volatilities on EMBARK EDUCATION 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 EMBARK EDUCATION with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and China Resources.
Diversification Opportunities for EMBARK EDUCATION and China Resources
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMBARK and China is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION 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 EMBARK EDUCATION 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 EMBARK EDUCATION 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 EMBARK EDUCATION i.e., EMBARK EDUCATION and China Resources go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and China Resources
If you would invest 284.00 in China Resources Beer on November 7, 2024 and sell it today you would earn a total of 4.00 from holding China Resources Beer or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. China Resources Beer
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| China Resources Beer |
EMBARK EDUCATION and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and China Resources
The main advantage of trading using opposite EMBARK EDUCATION and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION 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.| EMBARK EDUCATION vs. PRECISION DRILLING P | EMBARK EDUCATION vs. Major Drilling Group | EMBARK EDUCATION vs. Western Copper and | EMBARK EDUCATION vs. GREENX METALS LTD |
| China Resources vs. Sterling Construction | China Resources vs. Addtech AB | China Resources vs. DAIRY FARM INTL | China Resources vs. WIMFARM SA EO |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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