Correlation Between China Resources and Scottish Mortgage

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

Diversification Opportunities for China Resources and Scottish Mortgage

-0.19

Correlation Coefficient

China Resources  Scottish Mortgage

Good diversification

The 3 months correlation between China and Scottish is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Beer and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage 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 Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of China Resources i.e., China Resources and Scottish Mortgage go up and down completely randomly.

Pair Corralation between China Resources and Scottish Mortgage

Assuming the 90 days horizon China Resources Beer is expected to under-perform the Scottish Mortgage. In addition to that, China Resources is 1.69 times more volatile than Scottish Mortgage Investment. It trades about -0.05 of its total potential returns per unit of risk. Scottish Mortgage Investment is currently generating about 0.19 per unit of volatility. If you would invest  1,110  in Scottish Mortgage Investment on May 6, 2025 and sell it today you would earn a total of  162.00  from holding Scottish Mortgage Investment or generate 14.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

China Resources Beer  vs.  Scottish Mortgage Investment

China Resources Beer

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Resources Beer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Scottish Mortgage

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scottish Mortgage Investment are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Scottish Mortgage reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Resources and Scottish Mortgage

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

The idea behind China Resources Beer and Scottish Mortgage Investment 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 Stocks Directory module to find actively traded stocks across global markets.