Correlation Between Maccura Biotechnology and China Merchants
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By analyzing existing cross correlation between Maccura Biotechnology Co and China Merchants Bank, you can compare the effects of market volatilities on Maccura Biotechnology 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 Maccura Biotechnology with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maccura Biotechnology and China Merchants.
Diversification Opportunities for Maccura Biotechnology and China Merchants
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Maccura and China is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Maccura Biotechnology 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 Maccura Biotechnology 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 Maccura Biotechnology 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 Maccura Biotechnology i.e., Maccura Biotechnology and China Merchants go up and down completely randomly.
Pair Corralation between Maccura Biotechnology and China Merchants
Assuming the 90 days trading horizon Maccura Biotechnology is expected to generate 16.68 times less return on investment than China Merchants. In addition to that, Maccura Biotechnology is 1.69 times more volatile than China Merchants Bank. It trades about 0.0 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.08 per unit of volatility. If you would invest 2,781 in China Merchants Bank on September 2, 2024 and sell it today you would earn a total of 853.00 from holding China Merchants Bank or generate 30.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maccura Biotechnology Co vs. China Merchants Bank
Performance |
| Timeline |
| Maccura Biotechnology |
| China Merchants Bank |
Maccura Biotechnology and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maccura Biotechnology and China Merchants
The main advantage of trading using opposite Maccura Biotechnology and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maccura Biotechnology 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.The idea behind Maccura Biotechnology Co and China Merchants Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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