Correlation Between Minerals Technologies and China Resources
Can any of the company-specific risk be diversified away by investing in both Minerals Technologies 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 Minerals Technologies and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minerals Technologies and China Resources Power, you can compare the effects of market volatilities on Minerals Technologies 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 Minerals Technologies with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerals Technologies and China Resources.
Diversification Opportunities for Minerals Technologies and China Resources
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Minerals and China is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Minerals Technologies and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power and Minerals Technologies 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 Minerals 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 Power has no effect on the direction of Minerals Technologies i.e., Minerals Technologies and China Resources go up and down completely randomly.
Pair Corralation between Minerals Technologies and China Resources
Assuming the 90 days horizon Minerals Technologies is expected to under-perform the China Resources. In addition to that, Minerals Technologies is 1.3 times more volatile than China Resources Power. It trades about -0.06 of its total potential returns per unit of risk. China Resources Power is currently generating about -0.05 per unit of volatility. If you would invest 219.00 in China Resources Power on November 7, 2024 and sell it today you would lose (10.00) from holding China Resources Power or give up 4.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minerals Technologies vs. China Resources Power
Performance |
| Timeline |
| Minerals Technologies |
| China Resources Power |
Minerals Technologies and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minerals Technologies and China Resources
The main advantage of trading using opposite Minerals Technologies and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minerals Technologies 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.| Minerals Technologies vs. Hochschild Mining plc | Minerals Technologies vs. Clean Energy Fuels | Minerals Technologies vs. TROPHY GAMES DEV | Minerals Technologies vs. MOVIE GAMES SA |
| China Resources vs. CarsalesCom | China Resources vs. GRENKELEASING Dusseldorf | China Resources vs. Sixt Leasing SE | China Resources vs. MARKET VECTR RETAIL |
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.
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