Correlation Between China Merchants and Panda Financial
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By analyzing existing cross correlation between China Merchants Shekou and Panda Financial Holding, you can compare the effects of market volatilities on China Merchants and Panda Financial 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 Panda Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Panda Financial.
Diversification Opportunities for China Merchants and Panda Financial
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Panda is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Panda Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panda Financial Holding 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 Panda Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panda Financial Holding has no effect on the direction of China Merchants i.e., China Merchants and Panda Financial go up and down completely randomly.
Pair Corralation between China Merchants and Panda Financial
Assuming the 90 days trading horizon China Merchants Shekou is expected to under-perform the Panda Financial. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Shekou is 1.13 times less risky than Panda Financial. The stock trades about -0.01 of its potential returns per unit of risk. The Panda Financial Holding is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,574 in Panda Financial Holding on September 26, 2024 and sell it today you would lose (275.00) from holding Panda Financial Holding or give up 17.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Shekou vs. Panda Financial Holding
Performance |
| Timeline |
| China Merchants Shekou |
| Panda Financial Holding |
China Merchants and Panda Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Panda Financial
The main advantage of trading using opposite China Merchants and Panda Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Panda Financial 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 Panda Financial will offset losses from the drop in Panda Financial's long position.| China Merchants vs. PetroChina Co Ltd | China Merchants vs. China Mobile Limited | China Merchants vs. CNOOC Limited | China Merchants vs. Ping An Insurance |
| Panda Financial vs. China State Construction | Panda Financial vs. Poly Real Estate | Panda Financial vs. China Vanke Co | Panda Financial 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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