Correlation Between Songz Automobile and China Merchants
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By analyzing existing cross correlation between Songz Automobile Air and China Merchants Bank, you can compare the effects of market volatilities on Songz Automobile 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 Songz Automobile with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Songz Automobile and China Merchants.
Diversification Opportunities for Songz Automobile and China Merchants
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Songz and China is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Songz Automobile Air 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 Songz Automobile 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 Songz Automobile Air 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 Songz Automobile i.e., Songz Automobile and China Merchants go up and down completely randomly.
Pair Corralation between Songz Automobile and China Merchants
Assuming the 90 days trading horizon Songz Automobile Air is expected to generate 1.91 times more return on investment than China Merchants. However, Songz Automobile is 1.91 times more volatile than China Merchants Bank. It trades about 0.04 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.09 per unit of risk. If you would invest 678.00 in Songz Automobile Air on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Songz Automobile Air or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Songz Automobile Air vs. China Merchants Bank
Performance |
| Timeline |
| Songz Automobile Air |
| China Merchants Bank |
Songz Automobile and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Songz Automobile and China Merchants
The main advantage of trading using opposite Songz Automobile and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Songz Automobile 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.| Songz Automobile vs. BYD Co Ltd | Songz Automobile vs. China Mobile Limited | Songz Automobile vs. Agricultural Bank of | Songz Automobile vs. Industrial and Commercial |
| China Merchants vs. Yunnan Jianzhijia Health Chain | China Merchants vs. Mingchen Health Co | China Merchants vs. XinJiang GuoTong Pipeline | China Merchants vs. Healthcare 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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