Correlation Between China Merchants and Guangzhou Boji
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By analyzing existing cross correlation between China Merchants Shekou and Guangzhou Boji Medical, you can compare the effects of market volatilities on China Merchants and Guangzhou Boji 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 Guangzhou Boji. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Guangzhou Boji.
Diversification Opportunities for China Merchants and Guangzhou Boji
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Guangzhou is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Guangzhou Boji Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Boji Medical 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 Guangzhou Boji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Boji Medical has no effect on the direction of China Merchants i.e., China Merchants and Guangzhou Boji go up and down completely randomly.
Pair Corralation between China Merchants and Guangzhou Boji
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 0.64 times more return on investment than Guangzhou Boji. However, China Merchants Shekou is 1.57 times less risky than Guangzhou Boji. It trades about -0.16 of its potential returns per unit of risk. Guangzhou Boji Medical is currently generating about -0.23 per unit of risk. If you would invest 1,063 in China Merchants Shekou on October 18, 2024 and sell it today you would lose (54.00) from holding China Merchants Shekou or give up 5.08% 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. Guangzhou Boji Medical
Performance |
| Timeline |
| China Merchants Shekou |
| Guangzhou Boji Medical |
China Merchants and Guangzhou Boji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Guangzhou Boji
The main advantage of trading using opposite China Merchants and Guangzhou Boji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Guangzhou Boji 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 Guangzhou Boji will offset losses from the drop in Guangzhou Boji's long position.| China Merchants vs. Jiangnan Mould Plastic | China Merchants vs. Unisplendour Corp | China Merchants vs. Strait Innovation Internet | China Merchants vs. Sichuan Jinshi Technology |
| Guangzhou Boji vs. Shenzhen AV Display Co | Guangzhou Boji vs. Dazhong Transportation Group | Guangzhou Boji vs. Jiangsu Jinling Sports | Guangzhou Boji vs. China Aluminum International |
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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