Correlation Between China Merchants and Iat Automobile
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By analyzing existing cross correlation between China Merchants Shekou and Iat Automobile Technology, you can compare the effects of market volatilities on China Merchants and Iat Automobile 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 Iat Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Iat Automobile.
Diversification Opportunities for China Merchants and Iat Automobile
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Iat is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Iat Automobile Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iat Automobile Technology 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 Iat Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iat Automobile Technology has no effect on the direction of China Merchants i.e., China Merchants and Iat Automobile go up and down completely randomly.
Pair Corralation between China Merchants and Iat Automobile
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 0.69 times more return on investment than Iat Automobile. However, China Merchants Shekou is 1.45 times less risky than Iat Automobile. It trades about 0.13 of its potential returns per unit of risk. Iat Automobile Technology is currently generating about -0.02 per unit of risk. If you would invest 1,099 in China Merchants Shekou on August 31, 2024 and sell it today you would earn a total of 81.00 from holding China Merchants Shekou or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Iat Automobile Technology
Performance |
| Timeline |
| China Merchants Shekou |
| Iat Automobile Technology |
China Merchants and Iat Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Iat Automobile
The main advantage of trading using opposite China Merchants and Iat Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Iat Automobile 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 Iat Automobile will offset losses from the drop in Iat Automobile's long position.| China Merchants vs. Hengdian Entertainment Co | China Merchants vs. Shenzhen Glory Medical | China Merchants vs. Guangzhou Jinyi Media | China Merchants vs. Guangdong Jinma Entertainment |
| Iat Automobile vs. China State Construction | Iat Automobile vs. China Merchants Shekou | Iat Automobile vs. Huafa Industrial Co | Iat Automobile vs. China International Capital |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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