Correlation Between China Merchants and Northking Information
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By analyzing existing cross correlation between China Merchants Shekou and Northking Information Technology, you can compare the effects of market volatilities on China Merchants and Northking Information 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 Northking Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Northking Information.
Diversification Opportunities for China Merchants and Northking Information
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Northking is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Northking Information Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northking Information 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 Northking Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northking Information has no effect on the direction of China Merchants i.e., China Merchants and Northking Information go up and down completely randomly.
Pair Corralation between China Merchants and Northking Information
Assuming the 90 days trading horizon China Merchants Shekou is expected to under-perform the Northking Information. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Shekou is 1.44 times less risky than Northking Information. The stock trades about -0.2 of its potential returns per unit of risk. The Northking Information Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 1,557 in Northking Information Technology on November 6, 2024 and sell it today you would lose (125.00) from holding Northking Information Technology or give up 8.03% 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. Northking Information Technolo
Performance |
| Timeline |
| China Merchants Shekou |
| Northking Information |
China Merchants and Northking Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Northking Information
The main advantage of trading using opposite China Merchants and Northking Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Northking Information 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 Northking Information will offset losses from the drop in Northking Information's long position.| China Merchants vs. Yan Tai Shuang | China Merchants vs. Dr Peng Telecom | China Merchants vs. HaiXin Foods Co | China Merchants vs. Montage Technology 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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