Correlation Between China Resources and Linde Plc
Can any of the company-specific risk be diversified away by investing in both China Resources and Linde Plc 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 Linde Plc 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 Linde plc, you can compare the effects of market volatilities on China Resources and Linde Plc 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 Linde Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Linde Plc.
Diversification Opportunities for China Resources and Linde Plc
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Linde is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Linde plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc 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 Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc has no effect on the direction of China Resources i.e., China Resources and Linde Plc go up and down completely randomly.
Pair Corralation between China Resources and Linde Plc
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Linde Plc. In addition to that, China Resources is 2.85 times more volatile than Linde plc. It trades about -0.02 of its total potential returns per unit of risk. Linde plc is currently generating about 0.07 per unit of volatility. If you would invest 29,209 in Linde plc on October 13, 2024 and sell it today you would earn a total of 11,391 from holding Linde plc or generate 39.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Linde plc
Performance |
| Timeline |
| China Resources Beer |
| Linde plc |
China Resources and Linde Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Linde Plc
The main advantage of trading using opposite China Resources and Linde Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Linde Plc 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 Linde Plc will offset losses from the drop in Linde Plc's long position.| China Resources vs. CARSALESCOM | China Resources vs. COMBA TELECOM SYST | China Resources vs. Iridium Communications | China Resources vs. EAGLE MATERIALS |
| Linde Plc vs. China Resources Beer | Linde Plc vs. 24SEVENOFFICE GROUP AB | Linde Plc vs. MINCO SILVER | Linde Plc vs. De Grey Mining |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |