Correlation Between China Resources and 24SEVENOFFICE GROUP
Can any of the company-specific risk be diversified away by investing in both China Resources and 24SEVENOFFICE GROUP 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 China Resources and 24SEVENOFFICE GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on China Resources and 24SEVENOFFICE GROUP 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 China Resources with a short position of 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and 24SEVENOFFICE GROUP.
Diversification Opportunities for China Resources and 24SEVENOFFICE GROUP
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and 24SEVENOFFICE is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE GROUP and China Resources 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 China Resources Beer are associated (or correlated) with 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of China Resources i.e., China Resources and 24SEVENOFFICE GROUP go up and down completely randomly.
Pair Corralation between China Resources and 24SEVENOFFICE GROUP
Assuming the 90 days horizon China Resources Beer is expected to under-perform the 24SEVENOFFICE GROUP. But the stock apears to be less risky and, when comparing its historical volatility, China Resources Beer is 1.24 times less risky than 24SEVENOFFICE GROUP. The stock trades about -0.01 of its potential returns per unit of risk. The 24SEVENOFFICE GROUP AB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 41.00 in 24SEVENOFFICE GROUP AB on September 1, 2024 and sell it today you would earn a total of 159.00 from holding 24SEVENOFFICE GROUP AB or generate 387.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. 24SEVENOFFICE GROUP AB
Performance |
| Timeline |
| China Resources Beer |
| 24SEVENOFFICE GROUP |
China Resources and 24SEVENOFFICE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and 24SEVENOFFICE GROUP
The main advantage of trading using opposite China Resources and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP's long position.| China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. NMI Holdings | China Resources vs. Origin Agritech |
| 24SEVENOFFICE GROUP vs. SAP SE | 24SEVENOFFICE GROUP vs. Superior Plus Corp | 24SEVENOFFICE GROUP vs. NMI Holdings | 24SEVENOFFICE GROUP vs. Origin Agritech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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