Correlation Between Zhongrun Resources and China Merchants
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By analyzing existing cross correlation between Zhongrun Resources Investment and China Merchants Bank, you can compare the effects of market volatilities on Zhongrun Resources and China Merchants 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 Zhongrun Resources with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhongrun Resources and China Merchants.
Diversification Opportunities for Zhongrun Resources and China Merchants
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhongrun and China is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Zhongrun Resources Investment and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank and Zhongrun 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 Zhongrun Resources Investment are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Zhongrun Resources i.e., Zhongrun Resources and China Merchants go up and down completely randomly.
Pair Corralation between Zhongrun Resources and China Merchants
Assuming the 90 days trading horizon Zhongrun Resources Investment is expected to generate 3.73 times more return on investment than China Merchants. However, Zhongrun Resources is 3.73 times more volatile than China Merchants Bank. It trades about 0.17 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.2 per unit of risk. If you would invest 365.00 in Zhongrun Resources Investment on October 23, 2024 and sell it today you would earn a total of 51.00 from holding Zhongrun Resources Investment or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhongrun Resources Investment vs. China Merchants Bank
Performance |
| Timeline |
| Zhongrun Resources |
| China Merchants Bank |
Zhongrun Resources and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhongrun Resources and China Merchants
The main advantage of trading using opposite Zhongrun Resources and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhongrun Resources position performs unexpectedly, China Merchants 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 Merchants will offset losses from the drop in China Merchants' long position.| Zhongrun Resources vs. Double Medical Technology | Zhongrun Resources vs. Shenzhen Glory Medical | Zhongrun Resources vs. ZJBC Information Technology | Zhongrun Resources vs. Invengo Information Technology |
| China Merchants vs. Angang Steel Co | China Merchants vs. Guangdong Qunxing Toys | China Merchants vs. Jiangsu Hoperun Software | China Merchants vs. Guangzhou Dongfang Hotel |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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