Correlation Between China Resources and Volkswagen
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By analyzing existing cross correlation between China Resources Beer and Volkswagen AG VZO, you can compare the effects of market volatilities on China Resources and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Volkswagen.
Diversification Opportunities for China Resources and Volkswagen
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Volkswagen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Volkswagen AG VZO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG VZO 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG VZO has no effect on the direction of China Resources i.e., China Resources and Volkswagen go up and down completely randomly.
Pair Corralation between China Resources and Volkswagen
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Volkswagen. In addition to that, China Resources is 2.18 times more volatile than Volkswagen AG VZO. It trades about -0.02 of its total potential returns per unit of risk. Volkswagen AG VZO is currently generating about -0.02 per unit of volatility. If you would invest 10,777 in Volkswagen AG VZO on October 14, 2024 and sell it today you would lose (1,741) from holding Volkswagen AG VZO or give up 16.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Beer vs. Volkswagen AG VZO
Performance |
| Timeline |
| China Resources Beer |
| Volkswagen AG VZO |
China Resources and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Volkswagen
The main advantage of trading using opposite China Resources and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| China Resources vs. CARSALESCOM | China Resources vs. COMBA TELECOM SYST | China Resources vs. Iridium Communications | China Resources vs. EAGLE MATERIALS |
| Volkswagen vs. Monster Beverage Corp | Volkswagen vs. Wenzhou Kangning Hospital | Volkswagen vs. China Resources Beer | Volkswagen vs. US Physical Therapy |
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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