Correlation Between China Merchants and BOE Technology
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By analyzing existing cross correlation between China Merchants Bank and BOE Technology Group, you can compare the effects of market volatilities on China Merchants and BOE Technology 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 China Merchants with a short position of BOE Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and BOE Technology.
Diversification Opportunities for China Merchants and BOE Technology
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and BOE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and BOE Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOE Technology Group and China Merchants 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 China Merchants Bank are associated (or correlated) with BOE Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOE Technology Group has no effect on the direction of China Merchants i.e., China Merchants and BOE Technology go up and down completely randomly.
Pair Corralation between China Merchants and BOE Technology
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the BOE Technology. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 1.64 times less risky than BOE Technology. The stock trades about -0.18 of its potential returns per unit of risk. The BOE Technology Group is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 431.00 in BOE Technology Group on August 30, 2024 and sell it today you would lose (5.00) from holding BOE Technology Group or give up 1.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. BOE Technology Group
Performance |
| Timeline |
| China Merchants Bank |
| BOE Technology Group |
China Merchants and BOE Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and BOE Technology
The main advantage of trading using opposite China Merchants and BOE Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, BOE Technology 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 BOE Technology will offset losses from the drop in BOE Technology's long position.| China Merchants vs. Markor International Home | China Merchants vs. Yingde Greatchem Chemicals | China Merchants vs. Xiamen Goldenhome Co | China Merchants vs. Hunan Mendale Hometextile |
| BOE Technology vs. Kunwu Jiuding Investment | BOE Technology vs. Henan Shuanghui Investment | BOE Technology vs. GigaDevice SemiconductorBeiji | BOE Technology vs. Guangzhou Jointas Chemical |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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