Correlation Between Bank of Suzhou and China Merchants
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By analyzing existing cross correlation between Bank of Suzhou and China Merchants Bank, you can compare the effects of market volatilities on Bank of Suzhou 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 Bank of Suzhou with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Suzhou and China Merchants.
Diversification Opportunities for Bank of Suzhou and China Merchants
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Suzhou 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 Bank of Suzhou 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 Bank of Suzhou 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 Bank of Suzhou i.e., Bank of Suzhou and China Merchants go up and down completely randomly.
Pair Corralation between Bank of Suzhou and China Merchants
Assuming the 90 days trading horizon Bank of Suzhou is expected to generate 0.99 times more return on investment than China Merchants. However, Bank of Suzhou is 1.01 times less risky than China Merchants. It trades about 0.33 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.08 per unit of risk. If you would invest 736.00 in Bank of Suzhou on September 13, 2024 and sell it today you would earn a total of 58.00 from holding Bank of Suzhou or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Suzhou vs. China Merchants Bank
Performance |
| Timeline |
| Bank of Suzhou |
| China Merchants Bank |
Bank of Suzhou and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Suzhou and China Merchants
The main advantage of trading using opposite Bank of Suzhou and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Suzhou 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.| Bank of Suzhou vs. Cultural Investment Holdings | Bank of Suzhou vs. Gome Telecom Equipment | Bank of Suzhou vs. Holitech Technology Co | Bank of Suzhou vs. Zotye Automobile Co |
| China Merchants vs. Shanghai Yaoji Playing | China Merchants vs. Lander Sports Development | China Merchants vs. Lianhe Chemical Technology | China Merchants vs. Shenzhen Noposion Agrochemicals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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