Correlation Between China Merchants and Juneyao Airlines
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By analyzing existing cross correlation between China Merchants Shekou and Juneyao Airlines, you can compare the effects of market volatilities on China Merchants and Juneyao Airlines 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 Juneyao Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Juneyao Airlines.
Diversification Opportunities for China Merchants and Juneyao Airlines
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Juneyao is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Shekou and Juneyao Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juneyao Airlines 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 Juneyao Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juneyao Airlines has no effect on the direction of China Merchants i.e., China Merchants and Juneyao Airlines go up and down completely randomly.
Pair Corralation between China Merchants and Juneyao Airlines
Assuming the 90 days trading horizon China Merchants Shekou is expected to generate 1.28 times more return on investment than Juneyao Airlines. However, China Merchants is 1.28 times more volatile than Juneyao Airlines. It trades about 0.02 of its potential returns per unit of risk. Juneyao Airlines is currently generating about 0.02 per unit of risk. If you would invest 1,029 in China Merchants Shekou on September 14, 2024 and sell it today you would earn a total of 60.00 from holding China Merchants Shekou or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
China Merchants Shekou vs. Juneyao Airlines
Performance |
| Timeline |
| China Merchants Shekou |
| Juneyao Airlines |
China Merchants and Juneyao Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Juneyao Airlines
The main advantage of trading using opposite China Merchants and Juneyao Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Juneyao Airlines 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 Juneyao Airlines will offset losses from the drop in Juneyao Airlines' long position.| China Merchants vs. China National Software | China Merchants vs. AVIC Fund Management | China Merchants vs. Ningxia Younglight Chemicals | China Merchants vs. Linewell Software Co |
| Juneyao Airlines vs. China State Construction | Juneyao Airlines vs. Poly Real Estate | Juneyao Airlines vs. China Vanke Co | Juneyao Airlines 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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