Correlation Between CK Asset and China Resources

Can any of the company-specific risk be diversified away by investing in both CK Asset 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 CK Asset and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CK Asset Holdings and China Resources Land, you can compare the effects of market volatilities on CK Asset 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 CK Asset with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Asset and China Resources.

Diversification Opportunities for CK Asset and China Resources

0.0

Correlation Coefficient

CK Asset  China Resources

Pay attention - limited upside

The 3 months correlation between CHKGF and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CK Asset Holdings and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land and CK Asset 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 CK Asset Holdings 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 Land has no effect on the direction of CK Asset i.e., CK Asset and China Resources go up and down completely randomly.

Pair Corralation between CK Asset and China Resources

If you would invest  2,890  in China Resources Land on December 29, 2024 and sell it today you would earn a total of  680.00  from holding China Resources Land or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CK Asset Holdings  vs.  China Resources Land

CK Asset Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days CK Asset Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, CK Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

China Resources Land

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in China Resources Land are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward-looking indicators, China Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CK Asset and China Resources

The main advantage of trading using opposite CK Asset and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Asset 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.

The idea behind CK Asset Holdings and China Resources Land 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.