Correlation Between Eq Energy and China Resources
Can any of the company-specific risk be diversified away by investing in both Eq Energy 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 Eq Energy and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eq Energy Drink and China Resources Beer, you can compare the effects of market volatilities on Eq Energy 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 Eq Energy with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eq Energy and China Resources.
Diversification Opportunities for Eq Energy and China Resources
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EQLB and China is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Eq Energy Drink 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 Eq Energy 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 Eq Energy Drink 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 Eq Energy i.e., Eq Energy and China Resources go up and down completely randomly.
Pair Corralation between Eq Energy and China Resources
If you would invest 0.08 in Eq Energy Drink on September 5, 2024 and sell it today you would earn a total of 0.00 from holding Eq Energy Drink or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eq Energy Drink vs. China Resources Beer
Performance |
| Timeline |
| Eq Energy Drink |
| China Resources Beer |
Eq Energy and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eq Energy and China Resources
The main advantage of trading using opposite Eq Energy and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eq Energy 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.| Eq Energy vs. Greene Concepts | Eq Energy vs. National Beverage Corp | Eq Energy vs. Vita Coco | Eq Energy vs. Hill Street Beverage |
| China Resources vs. Tsingtao Brewery Co | China Resources vs. Budweiser Brewing | China Resources vs. Boston Beer | China Resources vs. Anheuser Busch Inbev |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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