Correlation Between China Merchants and Sichuan Fulin
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By analyzing existing cross correlation between China Merchants Shekou and Sichuan Fulin Transportation, you can compare the effects of market volatilities on China Merchants and Sichuan Fulin 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 Sichuan Fulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Sichuan Fulin.
Diversification Opportunities for China Merchants and Sichuan Fulin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Sichuan is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Sichuan Fulin Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Fulin Transp 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 Sichuan Fulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Fulin Transp has no effect on the direction of China Merchants i.e., China Merchants and Sichuan Fulin go up and down completely randomly.
Pair Corralation between China Merchants and Sichuan Fulin
Assuming the 90 days trading horizon China Merchants is expected to generate 2.69 times less return on investment than Sichuan Fulin. In addition to that, China Merchants is 1.2 times more volatile than Sichuan Fulin Transportation. It trades about 0.09 of its total potential returns per unit of risk. Sichuan Fulin Transportation is currently generating about 0.28 per unit of volatility. If you would invest 618.00 in Sichuan Fulin Transportation on September 1, 2024 and sell it today you would earn a total of 85.00 from holding Sichuan Fulin Transportation or generate 13.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Sichuan Fulin Transportation
Performance |
| Timeline |
| China Merchants Shekou |
| Sichuan Fulin Transp |
China Merchants and Sichuan Fulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Sichuan Fulin
The main advantage of trading using opposite China Merchants and Sichuan Fulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Sichuan Fulin 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 Sichuan Fulin will offset losses from the drop in Sichuan Fulin's long position.| China Merchants vs. Beijing Mainstreets Investment | China Merchants vs. Dhc Software Co | China Merchants vs. Cultural Investment Holdings | China Merchants vs. Keli Sensing Technology |
| Sichuan Fulin vs. Nanjing Putian Telecommunications | Sichuan Fulin vs. Shenzhen Hifuture Electric | Sichuan Fulin vs. Tianjin Realty Development | Sichuan Fulin vs. Shenyang Huitian Thermal |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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