Correlation Between SUN ART and China Resources
Can any of the company-specific risk be diversified away by investing in both SUN ART 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 SUN ART and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN ART RETAIL and China Resources Beer, you can compare the effects of market volatilities on SUN ART 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 SUN ART with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and China Resources.
Diversification Opportunities for SUN ART and China Resources
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SUN and China is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL 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 SUN ART 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 SUN ART RETAIL 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 SUN ART i.e., SUN ART and China Resources go up and down completely randomly.
Pair Corralation between SUN ART and China Resources
Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 1.17 times more return on investment than China Resources. However, SUN ART is 1.17 times more volatile than China Resources Beer. It trades about 0.26 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.04 per unit of risk. If you would invest 25.00 in SUN ART RETAIL on September 20, 2024 and sell it today you would earn a total of 6.00 from holding SUN ART RETAIL or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUN ART RETAIL vs. China Resources Beer
Performance |
| Timeline |
| SUN ART RETAIL |
| China Resources Beer |
SUN ART and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN ART and China Resources
The main advantage of trading using opposite SUN ART and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART 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.| SUN ART vs. SENECA FOODS A | SUN ART vs. Suntory Beverage Food | SUN ART vs. China Resources Beer | SUN ART vs. ScanSource |
| China Resources vs. Ribbon Communications | China Resources vs. SUN ART RETAIL | China Resources vs. SK TELECOM TDADR | China Resources vs. SIDETRADE EO 1 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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