Correlation Between China Resources and Hesai Group
Can any of the company-specific risk be diversified away by investing in both China Resources and Hesai Group 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 Hesai Group 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 Hesai Group American, you can compare the effects of market volatilities on China Resources and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Hesai Group.
Diversification Opportunities for China Resources and Hesai Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Hesai is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of China Resources i.e., China Resources and Hesai Group go up and down completely randomly.
Pair Corralation between China Resources and Hesai Group
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Hesai Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, China Resources Beer is 2.44 times less risky than Hesai Group. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Hesai Group American is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,220 in Hesai Group American on November 1, 2024 and sell it today you would lose (693.00) from holding Hesai Group American or give up 31.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
China Resources Beer vs. Hesai Group American
Performance |
| Timeline |
| China Resources Beer |
| Hesai Group American |
China Resources and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Hesai Group
The main advantage of trading using opposite China Resources and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| China Resources vs. Tsingtao Brewery Co | China Resources vs. Budweiser Brewing | China Resources vs. Boston Beer | China Resources vs. Anheuser Busch Inbev |
| Hesai Group vs. Boston Beer | Hesai Group vs. SNDL Inc | Hesai Group vs. Vodka Brands Corp | Hesai Group vs. China Resources Beer |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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