Correlation Between Sunwave Communications and China Merchants
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By analyzing existing cross correlation between Sunwave Communications Co and China Merchants Bank, you can compare the effects of market volatilities on Sunwave Communications and China Merchants 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 Sunwave Communications with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and China Merchants.
Diversification Opportunities for Sunwave Communications and China Merchants
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunwave and China is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and China Merchants go up and down completely randomly.
Pair Corralation between Sunwave Communications and China Merchants
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 4.79 times more return on investment than China Merchants. However, Sunwave Communications is 4.79 times more volatile than China Merchants Bank. It trades about 0.37 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.12 per unit of risk. If you would invest 640.00 in Sunwave Communications Co on November 27, 2024 and sell it today you would earn a total of 154.00 from holding Sunwave Communications Co or generate 24.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. China Merchants Bank
Performance |
| Timeline |
| Sunwave Communications |
| China Merchants Bank |
Sunwave Communications and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and China Merchants
The main advantage of trading using opposite Sunwave Communications and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| Sunwave Communications vs. Rising Nonferrous Metals | Sunwave Communications vs. Montage Technology Co | Sunwave Communications vs. Shuhua Sports Co | Sunwave Communications vs. Zhejiang Yongjin Metal |
| China Merchants vs. Guangzhou KingTeller Technology | China Merchants vs. Eyebright Medical Technology | China Merchants vs. Hubei Huaqiang High Tech | China Merchants vs. Linewell Software 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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