Correlation Between China Resources and PVH Corp
Can any of the company-specific risk be diversified away by investing in both China Resources and PVH Corp 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 PVH Corp 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 PVH Corp, you can compare the effects of market volatilities on China Resources and PVH Corp 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and PVH Corp.
Diversification Opportunities for China Resources and PVH Corp
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and PVH is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of China Resources i.e., China Resources and PVH Corp go up and down completely randomly.
Pair Corralation between China Resources and PVH Corp
Assuming the 90 days horizon China Resources Beer is expected to generate 2.27 times more return on investment than PVH Corp. However, China Resources is 2.27 times more volatile than PVH Corp. It trades about 0.02 of its potential returns per unit of risk. PVH Corp is currently generating about 0.01 per unit of risk. If you would invest 295.00 in China Resources Beer on October 14, 2024 and sell it today you would earn a total of 1.00 from holding China Resources Beer or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. PVH Corp
Performance |
| Timeline |
| China Resources Beer |
| PVH Corp |
China Resources and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and PVH Corp
The main advantage of trading using opposite China Resources and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp's long position.| China Resources vs. CARSALESCOM | China Resources vs. COMBA TELECOM SYST | China Resources vs. Iridium Communications | China Resources vs. EAGLE MATERIALS |
| PVH Corp vs. MICRONIC MYDATA | PVH Corp vs. CLEAN ENERGY FUELS | PVH Corp vs. Automatic Data Processing | PVH Corp vs. AM EAGLE OUTFITTERS |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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