Correlation Between FARM 51 and China Resources
Can any of the company-specific risk be diversified away by investing in both FARM 51 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 FARM 51 and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and China Resources Beer, you can compare the effects of market volatilities on FARM 51 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 FARM 51 with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and China Resources.
Diversification Opportunities for FARM 51 and China Resources
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FARM and China is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP 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 FARM 51 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 FARM 51 GROUP 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 FARM 51 i.e., FARM 51 and China Resources go up and down completely randomly.
Pair Corralation between FARM 51 and China Resources
Assuming the 90 days horizon FARM 51 GROUP is expected to under-perform the China Resources. In addition to that, FARM 51 is 1.0 times more volatile than China Resources Beer. It trades about -0.03 of its total potential returns per unit of risk. China Resources Beer is currently generating about -0.02 per unit of volatility. If you would invest 496.00 in China Resources Beer on October 11, 2024 and sell it today you would lose (214.00) from holding China Resources Beer or give up 43.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FARM 51 GROUP vs. China Resources Beer
Performance |
| Timeline |
| FARM 51 GROUP |
| China Resources Beer |
FARM 51 and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and China Resources
The main advantage of trading using opposite FARM 51 and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 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.| FARM 51 vs. PKSHA TECHNOLOGY INC | FARM 51 vs. Warner Music Group | FARM 51 vs. BJs Restaurants | FARM 51 vs. ETFS Coffee ETC |
| China Resources vs. Tower Semiconductor | China Resources vs. Playmates Toys Limited | China Resources vs. ULTRA CLEAN HLDGS | China Resources vs. ePlay Digital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |