Correlation Between China Resources and Impala Platinum
Can any of the company-specific risk be diversified away by investing in both China Resources and Impala Platinum 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 Impala Platinum 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 Impala Platinum Holdings, you can compare the effects of market volatilities on China Resources and Impala Platinum 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 Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Impala Platinum.
Diversification Opportunities for China Resources and Impala Platinum
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Impala is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings 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 Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of China Resources i.e., China Resources and Impala Platinum go up and down completely randomly.
Pair Corralation between China Resources and Impala Platinum
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Impala Platinum. But the stock apears to be less risky and, when comparing its historical volatility, China Resources Beer is 2.04 times less risky than Impala Platinum. The stock trades about -0.02 of its potential returns per unit of risk. The Impala Platinum Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 386.00 in Impala Platinum Holdings on October 10, 2024 and sell it today you would earn a total of 104.00 from holding Impala Platinum Holdings or generate 26.94% 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. Impala Platinum Holdings
Performance |
| Timeline |
| China Resources Beer |
| Impala Platinum Holdings |
China Resources and Impala Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Impala Platinum
The main advantage of trading using opposite China Resources and Impala Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Impala Platinum 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 Impala Platinum will offset losses from the drop in Impala Platinum's long position.| China Resources vs. FIRST SAVINGS FINL | China Resources vs. Ryman Healthcare Limited | China Resources vs. PennantPark Investment | China Resources vs. Cardinal Health |
| Impala Platinum vs. DeVry Education Group | Impala Platinum vs. CHRYSALIS INVESTMENTS LTD | Impala Platinum vs. REINET INVESTMENTS SCA | Impala Platinum vs. AGNC INVESTMENT |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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