Correlation Between China Resources and Bet-at-home

Can any of the company-specific risk be diversified away by investing in both China Resources and Bet-at-home 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 Bet-at-home 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 bet at home AG, you can compare the effects of market volatilities on China Resources and Bet-at-home 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 Bet-at-home. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Bet-at-home.

Diversification Opportunities for China Resources and Bet-at-home

-0.24

Correlation Coefficient

China Resources  Bet-at-home

Very good diversification

The 3 months correlation between China and Bet-at-home is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home 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 Bet-at-home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of China Resources i.e., China Resources and Bet-at-home go up and down completely randomly.

Pair Corralation between China Resources and Bet-at-home

Assuming the 90 days horizon China Resources is expected to generate 1.71 times less return on investment than Bet-at-home. But when comparing it to its historical volatility, China Resources Beer is 1.32 times less risky than Bet-at-home. It trades about 0.05 of its potential returns per unit of risk. bet at home AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  249.00  in bet at home AG on December 20, 2024 and sell it today you would earn a total of  25.00  from holding bet at home AG or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

China Resources Beer  vs.  bet at home AG

China Resources Beer

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in China Resources Beer are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

bet at home

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Bet-at-home unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Resources and Bet-at-home

The main advantage of trading using opposite China Resources and Bet-at-home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources position performs unexpectedly, Bet-at-home 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 Bet-at-home will offset losses from the drop in Bet-at-home's long position.

The idea behind China Resources Beer and bet at home AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.