Correlation Between China Resources and Barfresh Food
Can any of the company-specific risk be diversified away by investing in both China Resources and Barfresh Food 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 Barfresh Food 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 Barfresh Food Group, you can compare the effects of market volatilities on China Resources and Barfresh Food 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 Barfresh Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Barfresh Food.
Diversification Opportunities for China Resources and Barfresh Food
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Barfresh is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Barfresh Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barfresh Food Group 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 Barfresh Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barfresh Food Group has no effect on the direction of China Resources i.e., China Resources and Barfresh Food go up and down completely randomly.
Pair Corralation between China Resources and Barfresh Food
Assuming the 90 days horizon China Resources Beer is expected to generate 0.3 times more return on investment than Barfresh Food. However, China Resources Beer is 3.33 times less risky than Barfresh Food. It trades about -0.11 of its potential returns per unit of risk. Barfresh Food Group is currently generating about -0.04 per unit of risk. If you would invest 292.00 in China Resources Beer on September 4, 2024 and sell it today you would lose (31.00) from holding China Resources Beer or give up 10.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
China Resources Beer vs. Barfresh Food Group
Performance |
| Timeline |
| China Resources Beer |
| Barfresh Food Group |
China Resources and Barfresh Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Barfresh Food
The main advantage of trading using opposite China Resources and Barfresh Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Barfresh Food 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 Barfresh Food will offset losses from the drop in Barfresh Food's long position.| China Resources vs. Barfresh Food Group | China Resources vs. Fbec Worldwide | China Resources vs. Flow Beverage Corp | China Resources vs. Eq Energy Drink |
| Barfresh Food vs. Flow Beverage Corp | Barfresh Food vs. Fbec Worldwide | Barfresh Food vs. Hill Street Beverage | Barfresh Food vs. Eq Energy Drink |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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