Correlation Between China Resources and Herman Miller
Can any of the company-specific risk be diversified away by investing in both China Resources and Herman Miller 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 Herman Miller 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 Herman Miller, you can compare the effects of market volatilities on China Resources and Herman Miller 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 Herman Miller. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Herman Miller.
Diversification Opportunities for China Resources and Herman Miller
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Herman is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Herman Miller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herman Miller 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 Herman Miller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herman Miller has no effect on the direction of China Resources i.e., China Resources and Herman Miller go up and down completely randomly.
Pair Corralation between China Resources and Herman Miller
Assuming the 90 days horizon China Resources Beer is expected to generate 1.02 times more return on investment than Herman Miller. However, China Resources is 1.02 times more volatile than Herman Miller. It trades about -0.04 of its potential returns per unit of risk. Herman Miller is currently generating about -0.09 per unit of risk. If you would invest 318.00 in China Resources Beer on November 3, 2024 and sell it today you would lose (20.00) from holding China Resources Beer or give up 6.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Herman Miller
Performance |
| Timeline |
| China Resources Beer |
| Herman Miller |
China Resources and Herman Miller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Herman Miller
The main advantage of trading using opposite China Resources and Herman Miller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Herman Miller 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 Herman Miller will offset losses from the drop in Herman Miller's long position.| China Resources vs. LG Electronics | China Resources vs. Eidesvik Offshore ASA | China Resources vs. Rocket Internet SE | China Resources vs. KIMBALL ELECTRONICS |
| Herman Miller vs. BlueScope Steel Limited | Herman Miller vs. Monument Mining Limited | Herman Miller vs. GRIFFIN MINING LTD | Herman Miller vs. Khiron Life Sciences |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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