Correlation Between GAMING FAC and China Resources
Can any of the company-specific risk be diversified away by investing in both GAMING FAC 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 GAMING FAC and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and China Resources Gas, you can compare the effects of market volatilities on GAMING FAC 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 GAMING FAC with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and China Resources.
Diversification Opportunities for GAMING FAC and China Resources
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMING and China is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas and GAMING FAC 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 GAMING FAC SA 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 Gas has no effect on the direction of GAMING FAC i.e., GAMING FAC and China Resources go up and down completely randomly.
Pair Corralation between GAMING FAC and China Resources
Assuming the 90 days horizon GAMING FAC SA is expected to generate 1.44 times more return on investment than China Resources. However, GAMING FAC is 1.44 times more volatile than China Resources Gas. It trades about 0.03 of its potential returns per unit of risk. China Resources Gas is currently generating about -0.09 per unit of risk. If you would invest 165.00 in GAMING FAC SA on October 26, 2024 and sell it today you would earn a total of 3.00 from holding GAMING FAC SA or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. China Resources Gas
Performance |
| Timeline |
| GAMING FAC SA |
| China Resources Gas |
GAMING FAC and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and China Resources
The main advantage of trading using opposite GAMING FAC and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC 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.| GAMING FAC vs. PLANT VEDA FOODS | GAMING FAC vs. Tyson Foods | GAMING FAC vs. Cal Maine Foods | GAMING FAC vs. SENECA FOODS A |
| China Resources vs. DICKS Sporting Goods | China Resources vs. EMBARK EDUCATION LTD | China Resources vs. DeVry Education Group | China Resources vs. SPORT LISBOA E |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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