Correlation Between Computer and China Resources
Can any of the company-specific risk be diversified away by investing in both Computer and China Resources 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 Computer and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Computer And Technologies and China Resources Land, you can compare the effects of market volatilities on Computer and China Resources 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 Computer with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer and China Resources.
Diversification Opportunities for Computer and China Resources
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Computer and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Computer And Technologies and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and Computer 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 Computer And Technologies are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of Computer i.e., Computer and China Resources go up and down completely randomly.
Pair Corralation between Computer and China Resources
Assuming the 90 days horizon Computer And Technologies is expected to under-perform the China Resources. In addition to that, Computer is 1.63 times more volatile than China Resources Land. It trades about -0.06 of its total potential returns per unit of risk. China Resources Land is currently generating about 0.04 per unit of volatility. If you would invest 290.00 in China Resources Land on January 12, 2025 and sell it today you would earn a total of 12.00 from holding China Resources Land or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.78% |
| Values | Daily Returns |
Computer And Technologies vs. China Resources Land
Performance |
| Timeline |
| Computer And Technologies |
| China Resources Land |
Computer and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Computer and China Resources
The main advantage of trading using opposite Computer and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Computer vs. Tower Semiconductor | Computer vs. Nordic Semiconductor ASA | Computer vs. BE Semiconductor Industries | Computer vs. Peijia Medical Limited |
| China Resources vs. DEUTSCHE WOHNEN ADRS12 | China Resources vs. CTP NV EO | China Resources vs. SEAZEN GROUP LTD | China Resources vs. Atrium Ljungberg AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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