Correlation Between China Resources and SCANDMEDICAL SOLDK

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Can any of the company-specific risk be diversified away by investing in both China Resources and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK 040, you can compare the effects of market volatilities on China Resources and SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and SCANDMEDICAL SOLDK.

Diversification Opportunities for China Resources and SCANDMEDICAL SOLDK

-0.35
  Correlation Coefficient

Very good diversification

The 3 months correlation between China and SCANDMEDICAL is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and SCANDMEDICAL SOLDK 040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDMEDICAL SOLDK 040 has no effect on the direction of China Resources i.e., China Resources and SCANDMEDICAL SOLDK go up and down completely randomly.

Pair Corralation between China Resources and SCANDMEDICAL SOLDK

Assuming the 90 days horizon China Resources Beer is expected to generate 1.34 times more return on investment than SCANDMEDICAL SOLDK. However, China Resources is 1.34 times more volatile than SCANDMEDICAL SOLDK 040. It trades about 0.07 of its potential returns per unit of risk. SCANDMEDICAL SOLDK 040 is currently generating about 0.01 per unit of risk. If you would invest  326.00  in China Resources Beer on September 15, 2024 and sell it today you would earn a total of  12.00  from holding China Resources Beer or generate 3.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

China Resources Beer  vs.  SCANDMEDICAL SOLDK 040

 Performance 
       Timeline  
China Resources Beer 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in China Resources Beer are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Resources reported solid returns over the last few months and may actually be approaching a breakup point.
SCANDMEDICAL SOLDK 040 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCANDMEDICAL SOLDK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

China Resources and SCANDMEDICAL SOLDK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with China Resources and SCANDMEDICAL SOLDK

The main advantage of trading using opposite China Resources and SCANDMEDICAL SOLDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, SCANDMEDICAL SOLDK 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 SCANDMEDICAL SOLDK will offset losses from the drop in SCANDMEDICAL SOLDK's long position.
The idea behind China Resources Beer and SCANDMEDICAL SOLDK 040 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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