Correlation Between STORE ELECTRONIC and China Resources
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and China Resources Beer, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and China Resources.
Diversification Opportunities for STORE ELECTRONIC and China Resources
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between STORE and China is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and China Resources go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and China Resources
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.48 times more return on investment than China Resources. However, STORE ELECTRONIC is 1.48 times more volatile than China Resources Beer. It trades about 0.03 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.01 per unit of risk. If you would invest 12,751 in STORE ELECTRONIC on September 4, 2024 and sell it today you would earn a total of 1,329 from holding STORE ELECTRONIC or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
STORE ELECTRONIC vs. China Resources Beer
Performance |
| Timeline |
| STORE ELECTRONIC |
| China Resources Beer |
STORE ELECTRONIC and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and China Resources
The main advantage of trading using opposite STORE ELECTRONIC and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
| China Resources vs. HF SINCLAIR P | China Resources vs. PKSHA TECHNOLOGY INC | China Resources vs. WIZZ AIR HLDGUNSPADR4 | China Resources vs. Alaska Air Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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