Correlation Between China Merchants and Zhonghong Pulin
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By analyzing existing cross correlation between China Merchants Shekou and Zhonghong Pulin Medical, you can compare the effects of market volatilities on China Merchants and Zhonghong Pulin 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 Zhonghong Pulin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Zhonghong Pulin.
Diversification Opportunities for China Merchants and Zhonghong Pulin
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Zhonghong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Zhonghong Pulin Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhonghong Pulin 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 Zhonghong Pulin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhonghong Pulin Medical has no effect on the direction of China Merchants i.e., China Merchants and Zhonghong Pulin go up and down completely randomly.
Pair Corralation between China Merchants and Zhonghong Pulin
Assuming the 90 days trading horizon China Merchants Shekou is expected to under-perform the Zhonghong Pulin. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Shekou is 1.2 times less risky than Zhonghong Pulin. The stock trades about -0.01 of its potential returns per unit of risk. The Zhonghong Pulin Medical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,413 in Zhonghong Pulin Medical on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Zhonghong Pulin Medical or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Zhonghong Pulin Medical
Performance |
| Timeline |
| China Merchants Shekou |
| Zhonghong Pulin Medical |
China Merchants and Zhonghong Pulin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Zhonghong Pulin
The main advantage of trading using opposite China Merchants and Zhonghong Pulin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Zhonghong Pulin 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 Zhonghong Pulin will offset losses from the drop in Zhonghong Pulin's long position.| China Merchants vs. Kunshan Guoli Electronic | China Merchants vs. Juneyao Airlines | China Merchants vs. GigaDevice SemiconductorBeiji | China Merchants vs. GRINM Semiconductor Materials |
| Zhonghong Pulin vs. Lingyuan Iron Steel | Zhonghong Pulin vs. Gansu Jiu Steel | Zhonghong Pulin vs. Yindu Kitchen Equipment | Zhonghong Pulin vs. Dongjiang Environmental 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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