Correlation Between China Resources and Apple
Can any of the company-specific risk be diversified away by investing in both China Resources and Apple 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 China Resources and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Resources Beer and Apple Inc, you can compare the effects of market volatilities on China Resources and Apple 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 China Resources with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Apple.
Diversification Opportunities for China Resources and Apple
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Apple is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and China Resources 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 China Resources Beer are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of China Resources i.e., China Resources and Apple go up and down completely randomly.
Pair Corralation between China Resources and Apple
Assuming the 90 days horizon China Resources Beer is expected to under-perform the Apple. In addition to that, China Resources is 2.48 times more volatile than Apple Inc. It trades about -0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about -0.03 per unit of volatility. If you would invest 17,972 in Apple Inc on January 24, 2024 and sell it today you would lose (1,282) from holding Apple Inc or give up 7.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
China Resources Beer vs. Apple Inc
Performance |
| Timeline |
| China Resources Beer |
| Apple Inc |
China Resources and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Apple
The main advantage of trading using opposite China Resources and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| China Resources vs. CHINA TELECOM H | China Resources vs. Monster Beverage Corp | China Resources vs. Verizon Communications | China Resources vs. Molson Coors Beverage |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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