Correlation Between China Merchants and Fujian Longzhou
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By analyzing existing cross correlation between China Merchants Shekou and Fujian Longzhou Transportation, you can compare the effects of market volatilities on China Merchants and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Fujian Longzhou.
Diversification Opportunities for China Merchants and Fujian Longzhou
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Fujian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of China Merchants i.e., China Merchants and Fujian Longzhou go up and down completely randomly.
Pair Corralation between China Merchants and Fujian Longzhou
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 0.51 times more return on investment than Fujian Longzhou. However, China Merchants Shekou is 1.94 times less risky than Fujian Longzhou. It trades about -0.07 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about -0.07 per unit of risk. If you would invest 999.00 in China Merchants Shekou on November 2, 2024 and sell it today you would lose (21.00) from holding China Merchants Shekou or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Fujian Longzhou Transportation
Performance |
| Timeline |
| China Merchants Shekou |
| Fujian Longzhou Tran |
China Merchants and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Fujian Longzhou
The main advantage of trading using opposite China Merchants and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's long position.| China Merchants vs. Malion New Materials | China Merchants vs. Touchstone International Medical | China Merchants vs. Guangzhou Restaurants Group | China Merchants vs. NBTM New Materials |
| Fujian Longzhou vs. Southern PublishingMedia Co | Fujian Longzhou vs. Zhengzhou Coal Mining | Fujian Longzhou vs. Western Mining Co | Fujian Longzhou vs. Xinjiang Baodi Mining |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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