Correlation Between Chiba Bank and China Resources
Can any of the company-specific risk be diversified away by investing in both Chiba Bank 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 Chiba Bank and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and China Resources Beer, you can compare the effects of market volatilities on Chiba Bank 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 Chiba Bank with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and China Resources.
Diversification Opportunities for Chiba Bank and China Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chiba and China is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank 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 Chiba Bank 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 Chiba Bank 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 Chiba Bank i.e., Chiba Bank and China Resources go up and down completely randomly.
Pair Corralation between Chiba Bank and China Resources
Assuming the 90 days horizon Chiba Bank is expected to generate 0.52 times more return on investment than China Resources. However, Chiba Bank is 1.93 times less risky than China Resources. It trades about 0.27 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.18 per unit of risk. If you would invest 660.00 in Chiba Bank on August 28, 2024 and sell it today you would earn a total of 75.00 from holding Chiba Bank or generate 11.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. China Resources Beer
Performance |
| Timeline |
| Chiba Bank |
| China Resources Beer |
Chiba Bank and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and China Resources
The main advantage of trading using opposite Chiba Bank and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank 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.| Chiba Bank vs. COMMERCIAL VEHICLE | Chiba Bank vs. CarsalesCom | Chiba Bank vs. Motorcar Parts of | Chiba Bank vs. Daito Trust Construction |
| China Resources vs. Diamyd Medical AB | China Resources vs. Monster Beverage Corp | China Resources vs. Dairy Farm International | China Resources vs. INDOFOOD AGRI RES |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |