Correlation Between Daily Journal and China Resources
Can any of the company-specific risk be diversified away by investing in both Daily Journal 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 Daily Journal and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daily Journal Corp and China Resources Beer, you can compare the effects of market volatilities on Daily Journal 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 Daily Journal with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and China Resources.
Diversification Opportunities for Daily Journal and China Resources
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Daily and China is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer and Daily Journal 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 Daily Journal Corp 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 Beer has no effect on the direction of Daily Journal i.e., Daily Journal and China Resources go up and down completely randomly.
Pair Corralation between Daily Journal and China Resources
Given the investment horizon of 90 days Daily Journal Corp is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, Daily Journal Corp is 2.3 times less risky than China Resources. The stock trades about -0.34 of its potential returns per unit of risk. The China Resources Beer is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 261.00 in China Resources Beer on October 25, 2024 and sell it today you would earn a total of 32.00 from holding China Resources Beer or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Daily Journal Corp vs. China Resources Beer
Performance |
| Timeline |
| Daily Journal Corp |
| China Resources Beer |
Daily Journal and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daily Journal and China Resources
The main advantage of trading using opposite Daily Journal and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal 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.| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct Corp |
| China Resources vs. Molson Coors Brewing | China Resources vs. Budweiser Brewing | China Resources vs. Boston Beer | China Resources vs. Anheuser Busch InBev SANV |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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