Correlation Between Fujian Longzhou and China Merchants
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By analyzing existing cross correlation between Fujian Longzhou Transportation and China Merchants Bank, you can compare the effects of market volatilities on Fujian Longzhou 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 Fujian Longzhou with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fujian Longzhou and China Merchants.
Diversification Opportunities for Fujian Longzhou and China Merchants
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fujian and China is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fujian Longzhou Transportation 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 Fujian Longzhou 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 Fujian Longzhou Transportation 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 Fujian Longzhou i.e., Fujian Longzhou and China Merchants go up and down completely randomly.
Pair Corralation between Fujian Longzhou and China Merchants
Assuming the 90 days trading horizon Fujian Longzhou Transportation is expected to generate 2.72 times more return on investment than China Merchants. However, Fujian Longzhou is 2.72 times more volatile than China Merchants Bank. It trades about 0.26 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.31 per unit of risk. If you would invest 413.00 in Fujian Longzhou Transportation on November 29, 2024 and sell it today you would earn a total of 35.00 from holding Fujian Longzhou Transportation or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fujian Longzhou Transportation vs. China Merchants Bank
Performance |
| Timeline |
| Fujian Longzhou Tran |
| China Merchants Bank |
Fujian Longzhou and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fujian Longzhou and China Merchants
The main advantage of trading using opposite Fujian Longzhou and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fujian Longzhou 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.| Fujian Longzhou vs. Tjk Machinery Tianjin | Fujian Longzhou vs. Allied Machinery Co | Fujian Longzhou vs. Long Yuan Construction | Fujian Longzhou vs. Gansu Huangtai Wine marketing |
| China Merchants vs. Beijing HuaYuanYiTong Thermal | China Merchants vs. Jiangxi Copper Co | China Merchants vs. Zijin Mining Group | China Merchants vs. Rising Nonferrous Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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