Correlation Between China Resources and AGRICULTBK HADR/25
Can any of the company-specific risk be diversified away by investing in both China Resources and AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 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 AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on China Resources and AGRICULTBK HADR/25 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 AGRICULTBK HADR/25. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and AGRICULTBK HADR/25.
Diversification Opportunities for China Resources and AGRICULTBK HADR/25
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and AGRICULTBK is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR/25 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 AGRICULTBK HADR/25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR/25 has no effect on the direction of China Resources i.e., China Resources and AGRICULTBK HADR/25 go up and down completely randomly.
Pair Corralation between China Resources and AGRICULTBK HADR/25
Assuming the 90 days horizon China Resources Beer is expected to under-perform the AGRICULTBK HADR/25. In addition to that, China Resources is 2.28 times more volatile than AGRICULTBK HADR25 YC. It trades about -0.17 of its total potential returns per unit of risk. AGRICULTBK HADR25 YC is currently generating about 0.03 per unit of volatility. If you would invest 1,130 in AGRICULTBK HADR25 YC on August 29, 2024 and sell it today you would earn a total of 10.00 from holding AGRICULTBK HADR25 YC or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| China Resources Beer |
| AGRICULTBK HADR/25 |
China Resources and AGRICULTBK HADR/25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and AGRICULTBK HADR/25
The main advantage of trading using opposite China Resources and AGRICULTBK HADR/25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, AGRICULTBK HADR/25 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 AGRICULTBK HADR/25 will offset losses from the drop in AGRICULTBK HADR/25's long position.| China Resources vs. Diamyd Medical AB | China Resources vs. Monster Beverage Corp | China Resources vs. Dairy Farm International | China Resources vs. INDOFOOD AGRI RES |
| AGRICULTBK HADR/25 vs. The Toronto Dominion Bank | AGRICULTBK HADR/25 vs. Superior Plus Corp | AGRICULTBK HADR/25 vs. NMI Holdings | AGRICULTBK HADR/25 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |