Correlation Between China Resources and Strategic Education
Can any of the company-specific risk be diversified away by investing in both China Resources and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on China Resources and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Strategic Education.
Diversification Opportunities for China Resources and Strategic Education
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Strategic is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of China Resources i.e., China Resources and Strategic Education go up and down completely randomly.
Pair Corralation between China Resources and Strategic Education
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Strategic Education. In addition to that, China Resources is 2.41 times more volatile than Strategic Education. It trades about -0.03 of its total potential returns per unit of risk. Strategic Education is currently generating about 0.07 per unit of volatility. If you would invest 9,091 in Strategic Education on September 13, 2024 and sell it today you would earn a total of 159.00 from holding Strategic Education or generate 1.75% 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. Strategic Education
Performance |
| Timeline |
| China Resources Beer |
| Strategic Education |
China Resources and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Strategic Education
The main advantage of trading using opposite China Resources and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education'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 |
| Strategic Education vs. Tradeweb Markets | Strategic Education vs. SALESFORCE INC CDR | Strategic Education vs. CDN IMPERIAL BANK | Strategic Education vs. OAKTRSPECLENDNEW |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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