Correlation Between CeoTronics and China Resources
Can any of the company-specific risk be diversified away by investing in both CeoTronics 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 CeoTronics and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and China Resources Beer, you can compare the effects of market volatilities on CeoTronics 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 CeoTronics with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and China Resources.
Diversification Opportunities for CeoTronics and China Resources
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CeoTronics and China is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG 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 CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and China Resources go up and down completely randomly.
Pair Corralation between CeoTronics and China Resources
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 0.57 times more return on investment than China Resources. However, CeoTronics AG is 1.77 times less risky than China Resources. It trades about -0.03 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.17 per unit of risk. If you would invest 559.00 in CeoTronics AG on August 29, 2024 and sell it today you would lose (9.00) from holding CeoTronics AG or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. China Resources Beer
Performance |
| Timeline |
| CeoTronics AG |
| China Resources Beer |
CeoTronics and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and China Resources
The main advantage of trading using opposite CeoTronics and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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.| CeoTronics vs. Beyond Meat | CeoTronics vs. JJ SNACK FOODS | CeoTronics vs. Globe Trade Centre | CeoTronics vs. JAPAN TOBACCO UNSPADR12 |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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