Correlation Between Eat Beyond and China Resources
Can any of the company-specific risk be diversified away by investing in both Eat Beyond 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 Eat Beyond and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eat Beyond Global and China Resources Beer, you can compare the effects of market volatilities on Eat Beyond 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 Eat Beyond with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eat Beyond and China Resources.
Diversification Opportunities for Eat Beyond and China Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eat and China is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eat Beyond Global 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 Eat Beyond 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 Eat Beyond Global 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 Eat Beyond i.e., Eat Beyond and China Resources go up and down completely randomly.
Pair Corralation between Eat Beyond and China Resources
Assuming the 90 days horizon Eat Beyond Global is expected to generate 7.17 times more return on investment than China Resources. However, Eat Beyond is 7.17 times more volatile than China Resources Beer. It trades about 0.07 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.04 per unit of risk. If you would invest 19.00 in Eat Beyond Global on August 28, 2024 and sell it today you would lose (9.60) from holding Eat Beyond Global or give up 50.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eat Beyond Global vs. China Resources Beer
Performance |
| Timeline |
| Eat Beyond Global |
| China Resources Beer |
Eat Beyond and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eat Beyond and China Resources
The main advantage of trading using opposite Eat Beyond and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eat Beyond 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.| Eat Beyond vs. Elysee Development Corp | Eat Beyond vs. Azimut Holding SpA | Eat Beyond vs. Ameritrans Capital Corp | Eat Beyond vs. Aimia Inc |
| China Resources vs. Budweiser Brewing | China Resources vs. Anheuser Busch InBev SANV | China Resources vs. Anheuser Busch Inbev | China Resources vs. Molson Coors Brewing |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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