Correlation Between China Resources and Wayside Technology
Can any of the company-specific risk be diversified away by investing in both China Resources and Wayside Technology 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 Wayside Technology 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 Wayside Technology Group, you can compare the effects of market volatilities on China Resources and Wayside Technology 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Wayside Technology.
Diversification Opportunities for China Resources and Wayside Technology
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Wayside is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of China Resources i.e., China Resources and Wayside Technology go up and down completely randomly.
Pair Corralation between China Resources and Wayside Technology
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Wayside Technology. In addition to that, China Resources is 1.12 times more volatile than Wayside Technology Group. It trades about -0.03 of its total potential returns per unit of risk. Wayside Technology Group is currently generating about 0.16 per unit of volatility. If you would invest 11,200 in Wayside Technology Group on September 13, 2024 and sell it today you would earn a total of 1,000.00 from holding Wayside Technology Group or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Wayside Technology Group
Performance |
| Timeline |
| China Resources Beer |
| Wayside Technology |
China Resources and Wayside Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Wayside Technology
The main advantage of trading using opposite China Resources and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Wayside Technology 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 Wayside Technology will offset losses from the drop in Wayside Technology's long position.| China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. SIVERS SEMICONDUCTORS AB | China Resources vs. NorAm Drilling AS |
| Wayside Technology vs. Arrow Electronics | Wayside Technology vs. DICKER DATA LTD | Wayside Technology vs. KAGA EL LTD |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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