Correlation Between Richardson Electronics and China Resources
Can any of the company-specific risk be diversified away by investing in both Richardson Electronics 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 Richardson Electronics and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richardson Electronics and China Resources Beer, you can compare the effects of market volatilities on Richardson Electronics 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 Richardson Electronics with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richardson Electronics and China Resources.
Diversification Opportunities for Richardson Electronics and China Resources
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Richardson and China is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Richardson Electronics 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 Richardson Electronics 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 Richardson Electronics 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 Richardson Electronics i.e., Richardson Electronics and China Resources go up and down completely randomly.
Pair Corralation between Richardson Electronics and China Resources
Assuming the 90 days horizon Richardson Electronics is expected to generate 1.19 times more return on investment than China Resources. However, Richardson Electronics is 1.19 times more volatile than China Resources Beer. It trades about -0.08 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.15 per unit of risk. If you would invest 1,308 in Richardson Electronics on October 29, 2024 and sell it today you would lose (75.00) from holding Richardson Electronics or give up 5.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richardson Electronics vs. China Resources Beer
Performance |
| Timeline |
| Richardson Electronics |
| China Resources Beer |
Richardson Electronics and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richardson Electronics and China Resources
The main advantage of trading using opposite Richardson Electronics and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richardson Electronics 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.| Richardson Electronics vs. GEELY AUTOMOBILE | Richardson Electronics vs. CONTAGIOUS GAMING INC | Richardson Electronics vs. PENN NATL GAMING | Richardson Electronics vs. Penn National Gaming |
| China Resources vs. Geely Automobile Holdings | China Resources vs. MeVis Medical Solutions | China Resources vs. CVR Medical Corp | China Resources vs. MEDICAL FACILITIES NEW |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |