Correlation Between China Resources and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both China Resources and PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER, you can compare the effects of market volatilities on China Resources and PEH WERTPAPIER 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 PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and PEH WERTPAPIER.
Diversification Opportunities for China Resources and PEH WERTPAPIER
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and PEH is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER 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 PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of China Resources i.e., China Resources and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between China Resources and PEH WERTPAPIER
Assuming the 90 days horizon China Resources Beer is expected to under-perform the PEH WERTPAPIER. In addition to that, China Resources is 2.1 times more volatile than PEH WERTPAPIER. It trades about -0.01 of its total potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.05 per unit of volatility. If you would invest 1,599 in PEH WERTPAPIER on September 5, 2024 and sell it today you would earn a total of 561.00 from holding PEH WERTPAPIER or generate 35.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. PEH WERTPAPIER
Performance |
| Timeline |
| China Resources Beer |
| PEH WERTPAPIER |
China Resources and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and PEH WERTPAPIER
The main advantage of trading using opposite China Resources and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER's long position.The idea behind China Resources Beer and PEH WERTPAPIER 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.| PEH WERTPAPIER vs. China Resources Beer | PEH WERTPAPIER vs. Fast Retailing Co | PEH WERTPAPIER vs. UNITED RENTALS | PEH WERTPAPIER vs. United Rentals |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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