Correlation Between China Merchants and Beijing Enlight
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By analyzing existing cross correlation between China Merchants Shekou and Beijing Enlight Media, you can compare the effects of market volatilities on China Merchants and Beijing Enlight 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 Beijing Enlight. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Beijing Enlight.
Diversification Opportunities for China Merchants and Beijing Enlight
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Beijing is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Beijing Enlight Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enlight Media 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 Beijing Enlight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enlight Media has no effect on the direction of China Merchants i.e., China Merchants and Beijing Enlight go up and down completely randomly.
Pair Corralation between China Merchants and Beijing Enlight
Assuming the 90 days trading horizon China Merchants Shekou is expected to under-perform the Beijing Enlight. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Shekou is 1.23 times less risky than Beijing Enlight. The stock trades about -0.01 of its potential returns per unit of risk. The Beijing Enlight Media is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 792.00 in Beijing Enlight Media on October 26, 2024 and sell it today you would earn a total of 158.00 from holding Beijing Enlight Media or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Beijing Enlight Media
Performance |
| Timeline |
| China Merchants Shekou |
| Beijing Enlight Media |
China Merchants and Beijing Enlight Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Beijing Enlight
The main advantage of trading using opposite China Merchants and Beijing Enlight positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Beijing Enlight 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 Beijing Enlight will offset losses from the drop in Beijing Enlight's long position.| China Merchants vs. Dr Peng Telecom | China Merchants vs. Innovative Medical Management | China Merchants vs. Gansu Huangtai Wine marketing | China Merchants vs. Allwin Telecommunication Co |
| Beijing Enlight vs. China State Construction | Beijing Enlight vs. Poly Real Estate | Beijing Enlight vs. China Vanke Co | Beijing Enlight vs. China Merchants Shekou |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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