Correlation Between China Resources and ASSOC BR
Can any of the company-specific risk be diversified away by investing in both China Resources and ASSOC BR 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 ASSOC BR 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 ASSOC BR FOODS, you can compare the effects of market volatilities on China Resources and ASSOC BR 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 ASSOC BR. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and ASSOC BR.
Diversification Opportunities for China Resources and ASSOC BR
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and ASSOC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS 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 ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of China Resources i.e., China Resources and ASSOC BR go up and down completely randomly.
Pair Corralation between China Resources and ASSOC BR
Assuming the 90 days horizon China Resources Beer is expected to under-perform the ASSOC BR. In addition to that, China Resources is 2.16 times more volatile than ASSOC BR FOODS. It trades about -0.04 of its total potential returns per unit of risk. ASSOC BR FOODS is currently generating about 0.02 per unit of volatility. If you would invest 2,489 in ASSOC BR FOODS on September 20, 2024 and sell it today you would earn a total of 11.00 from holding ASSOC BR FOODS or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. ASSOC BR FOODS
Performance |
| Timeline |
| China Resources Beer |
| ASSOC BR FOODS |
China Resources and ASSOC BR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and ASSOC BR
The main advantage of trading using opposite China Resources and ASSOC BR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, ASSOC BR 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 ASSOC BR will offset losses from the drop in ASSOC BR's long position.| China Resources vs. Ribbon Communications | China Resources vs. SUN ART RETAIL | China Resources vs. SK TELECOM TDADR | China Resources vs. SIDETRADE EO 1 |
| ASSOC BR vs. Superior Plus Corp | ASSOC BR vs. SIVERS SEMICONDUCTORS AB | ASSOC BR vs. NorAm Drilling AS | ASSOC BR vs. Norsk Hydro ASA |
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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