Correlation Between China Resources and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both China Resources and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical SE, you can compare the effects of market volatilities on China Resources and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and CompuGroup Medical.
Diversification Opportunities for China Resources and CompuGroup Medical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and CompuGroup is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of China Resources i.e., China Resources and CompuGroup Medical go up and down completely randomly.
Pair Corralation between China Resources and CompuGroup Medical
Assuming the 90 days horizon China Resources Beer is expected to generate 1.02 times more return on investment than CompuGroup Medical. However, China Resources is 1.02 times more volatile than CompuGroup Medical SE. It trades about 0.02 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about -0.02 per unit of risk. If you would invest 271.00 in China Resources Beer on October 17, 2024 and sell it today you would earn a total of 13.00 from holding China Resources Beer or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. CompuGroup Medical SE
Performance |
| Timeline |
| China Resources Beer |
| CompuGroup Medical |
China Resources and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and CompuGroup Medical
The main advantage of trading using opposite China Resources and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| China Resources vs. Renesas Electronics | China Resources vs. National Beverage Corp | China Resources vs. STMicroelectronics NV | China Resources vs. Nucletron Electronic Aktiengesellschaft |
| CompuGroup Medical vs. CITY OFFICE REIT | CompuGroup Medical vs. GALENA MINING LTD | CompuGroup Medical vs. alstria office REIT AG | CompuGroup Medical vs. Endeavour Mining PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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