Correlation Between China Merchants and 5I5j Holding
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By analyzing existing cross correlation between China Merchants Shekou and 5I5j Holding Group, you can compare the effects of market volatilities on China Merchants and 5I5j Holding 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 Merchants with a short position of 5I5j Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and 5I5j Holding.
Diversification Opportunities for China Merchants and 5I5j Holding
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and 5I5j is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and 5I5j Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5I5j Holding Group and China Merchants 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 Merchants Shekou are associated (or correlated) with 5I5j Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5I5j Holding Group has no effect on the direction of China Merchants i.e., China Merchants and 5I5j Holding go up and down completely randomly.
Pair Corralation between China Merchants and 5I5j Holding
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 0.51 times more return on investment than 5I5j Holding. However, China Merchants Shekou is 1.96 times less risky than 5I5j Holding. It trades about -0.38 of its potential returns per unit of risk. 5I5j Holding Group is currently generating about -0.48 per unit of risk. If you would invest 1,089 in China Merchants Shekou on October 14, 2024 and sell it today you would lose (106.00) from holding China Merchants Shekou or give up 9.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. 5I5j Holding Group
Performance |
| Timeline |
| China Merchants Shekou |
| 5I5j Holding Group |
China Merchants and 5I5j Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and 5I5j Holding
The main advantage of trading using opposite China Merchants and 5I5j Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, 5I5j Holding 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 5I5j Holding will offset losses from the drop in 5I5j Holding's long position.| China Merchants vs. Hubei Geoway Investment | China Merchants vs. Zoje Resources Investment | China Merchants vs. Chengdu Xingrong Investment | China Merchants vs. Cultural Investment Holdings |
| 5I5j Holding vs. Heilongjiang Publishing Media | 5I5j Holding vs. Zhengping RoadBridge Constr | 5I5j Holding vs. Threes Company Media | 5I5j Holding vs. JiShi Media Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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