Correlation Between Shenzhen Zhongzhuang and China Merchants
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By analyzing existing cross correlation between Shenzhen Zhongzhuang Construction and China Merchants Bank, you can compare the effects of market volatilities on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Zhongzhuang and China Merchants.
Diversification Opportunities for Shenzhen Zhongzhuang and China Merchants
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenzhen and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Zhongzhuang Construct 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 Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang Construction 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 Shenzhen Zhongzhuang i.e., Shenzhen Zhongzhuang and China Merchants go up and down completely randomly.
Pair Corralation between Shenzhen Zhongzhuang and China Merchants
Assuming the 90 days trading horizon Shenzhen Zhongzhuang Construction is expected to under-perform the China Merchants. In addition to that, Shenzhen Zhongzhuang is 2.12 times more volatile than China Merchants Bank. It trades about -0.01 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.0 per unit of volatility. If you would invest 3,983 in China Merchants Bank on October 16, 2024 and sell it today you would lose (76.00) from holding China Merchants Bank or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen Zhongzhuang Construct vs. China Merchants Bank
Performance |
| Timeline |
| Shenzhen Zhongzhuang |
| China Merchants Bank |
Shenzhen Zhongzhuang and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen Zhongzhuang and China Merchants
The main advantage of trading using opposite Shenzhen Zhongzhuang and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Zhongzhuang 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.| Shenzhen Zhongzhuang vs. Jiangxi Hengda Hi Tech | Shenzhen Zhongzhuang vs. Kuang Chi Technologies | Shenzhen Zhongzhuang vs. Beijing Sanyuan Foods | Shenzhen Zhongzhuang vs. Guangdong Wens Foodstuff |
| China Merchants vs. Shenzhen Zhongzhuang Construction | China Merchants vs. Huasi Agricultural Development | China Merchants vs. Gifore Agricultural Machinery | China Merchants vs. Shuhua Sports 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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