Correlation Between China Resources and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both China Resources and SEALED AIR 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 SEALED AIR 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 SEALED AIR , you can compare the effects of market volatilities on China Resources and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and SEALED AIR.
Diversification Opportunities for China Resources and SEALED AIR
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and SEALED is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of China Resources i.e., China Resources and SEALED AIR go up and down completely randomly.
Pair Corralation between China Resources and SEALED AIR
Assuming the 90 days horizon China Resources Beer is expected to generate 2.33 times more return on investment than SEALED AIR. However, China Resources is 2.33 times more volatile than SEALED AIR . It trades about 0.01 of its potential returns per unit of risk. SEALED AIR is currently generating about 0.0 per unit of risk. If you would invest 292.00 in China Resources Beer on October 17, 2024 and sell it today you would lose (8.00) from holding China Resources Beer or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
China Resources Beer vs. SEALED AIR
Performance |
| Timeline |
| China Resources Beer |
| SEALED AIR |
China Resources and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and SEALED AIR
The main advantage of trading using opposite China Resources and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.| China Resources vs. Automatic Data Processing | China Resources vs. Molina Healthcare | China Resources vs. US Physical Therapy | China Resources vs. SILVER BULLET DATA |
| SEALED AIR vs. THAI BEVERAGE | SEALED AIR vs. China Resources Beer | SEALED AIR vs. Canadian Utilities Limited | SEALED AIR vs. UNITED UTILITIES GR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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