Correlation Between China Securities and China Merchants
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By analyzing existing cross correlation between China Securities 800 and China Merchants Shekou, you can compare the effects of market volatilities on China Securities 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 China Securities with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and China Merchants.
Diversification Opportunities for China Securities and China Merchants
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and China Merchants Shekou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Shekou and China Securities 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 Securities 800 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 Shekou has no effect on the direction of China Securities i.e., China Securities and China Merchants go up and down completely randomly.
Pair Corralation between China Securities and China Merchants
Assuming the 90 days trading horizon China Securities is expected to generate 1.21 times less return on investment than China Merchants. But when comparing it to its historical volatility, China Securities 800 is 2.15 times less risky than China Merchants. It trades about 0.01 of its potential returns per unit of risk. China Merchants Shekou is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,287 in China Merchants Shekou on September 1, 2024 and sell it today you would lose (109.00) from holding China Merchants Shekou or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
China Securities 800 vs. China Merchants Shekou
Performance |
| Timeline |
China Securities and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
China Merchants Shekou
Pair trading matchups for China Merchants
Pair Trading with China Securities and China Merchants
The main advantage of trading using opposite China Securities and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities 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.| China Securities vs. Everjoy Health Group | China Securities vs. Fuzhou Rockchip Electronics | China Securities vs. Hangzhou Prevail Optoelectronic | China Securities vs. Aurora Optoelectronics Co |
| China Merchants vs. Beijing Mainstreets Investment | China Merchants vs. Dhc Software Co | China Merchants vs. Cultural Investment Holdings | China Merchants vs. Keli Sensing Technology |
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.
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