Correlation Between Snam SpA and China Resources
Can any of the company-specific risk be diversified away by investing in both Snam SpA 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 Snam SpA and China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snam SpA and China Resources Gas, you can compare the effects of market volatilities on Snam SpA 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 Snam SpA with a short position of China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snam SpA and China Resources.
Diversification Opportunities for Snam SpA and China Resources
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Snam and China is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Snam SpA and China Resources Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Gas and Snam SpA 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 Snam SpA 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 Gas has no effect on the direction of Snam SpA i.e., Snam SpA and China Resources go up and down completely randomly.
Pair Corralation between Snam SpA and China Resources
Assuming the 90 days horizon Snam SpA is expected to under-perform the China Resources. But the stock apears to be less risky and, when comparing its historical volatility, Snam SpA is 4.5 times less risky than China Resources. The stock trades about -0.21 of its potential returns per unit of risk. The China Resources Gas is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 356.00 in China Resources Gas on September 25, 2024 and sell it today you would earn a total of 12.00 from holding China Resources Gas or generate 3.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Snam SpA vs. China Resources Gas
Performance |
Timeline |
Snam SpA |
China Resources Gas |
Snam SpA and China Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Snam SpA and China Resources
The main advantage of trading using opposite Snam SpA and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snam SpA 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.Snam SpA vs. CenterPoint Energy | Snam SpA vs. Atmos Energy | Snam SpA vs. China Resources Gas | Snam SpA vs. APA Group |
China Resources vs. CenterPoint Energy | China Resources vs. Snam SpA | China Resources vs. Atmos Energy | China Resources vs. APA 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |