Correlation Between China Resources and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both China Resources and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on China Resources and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and DALATA HOTEL.
Diversification Opportunities for China Resources and DALATA HOTEL
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and DALATA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of China Resources i.e., China Resources and DALATA HOTEL go up and down completely randomly.
Pair Corralation between China Resources and DALATA HOTEL
Assuming the 90 days horizon China Resources is expected to generate 3.04 times less return on investment than DALATA HOTEL. In addition to that, China Resources is 4.27 times more volatile than DALATA HOTEL. It trades about 0.02 of its total potential returns per unit of risk. DALATA HOTEL is currently generating about 0.32 per unit of volatility. If you would invest 436.00 in DALATA HOTEL on November 27, 2024 and sell it today you would earn a total of 18.00 from holding DALATA HOTEL or generate 4.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. DALATA HOTEL
Performance |
| Timeline |
| China Resources Beer |
| DALATA HOTEL |
China Resources and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and DALATA HOTEL
The main advantage of trading using opposite China Resources and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| China Resources vs. PLANT VEDA FOODS | China Resources vs. SOUTHWEST AIRLINES | China Resources vs. US Foods Holding | China Resources vs. United Natural Foods |
| DALATA HOTEL vs. Easy Software AG | DALATA HOTEL vs. Infrastrutture Wireless Italiane | DALATA HOTEL vs. Cognizant Technology Solutions | DALATA HOTEL vs. Firan Technology Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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