Correlation Between Xi An and China Merchants
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By analyzing existing cross correlation between Xi An Triangle and China Merchants Bank, you can compare the effects of market volatilities on Xi An 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 Xi An with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xi An and China Merchants.
Diversification Opportunities for Xi An and China Merchants
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 300775 and China is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Xi An Triangle 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 Xi An 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 Xi An Triangle 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 Xi An i.e., Xi An and China Merchants go up and down completely randomly.
Pair Corralation between Xi An and China Merchants
Assuming the 90 days trading horizon Xi An Triangle is expected to under-perform the China Merchants. In addition to that, Xi An is 2.4 times more volatile than China Merchants Bank. It trades about -0.09 of its total potential returns per unit of risk. China Merchants Bank is currently generating about -0.09 per unit of volatility. If you would invest 3,736 in China Merchants Bank on September 1, 2024 and sell it today you would lose (102.00) from holding China Merchants Bank or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xi An Triangle vs. China Merchants Bank
Performance |
| Timeline |
| Xi An Triangle |
| China Merchants Bank |
Xi An and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xi An and China Merchants
The main advantage of trading using opposite Xi An and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xi An 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.| Xi An vs. Fujian Newland Computer | Xi An vs. CSSC Offshore Marine | Xi An vs. Xiangyang Automobile Bearing | Xi An vs. Ningbo Fangzheng Automobile |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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