Correlation Between China Merchants and Gansu Huangtai
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By analyzing existing cross correlation between China Merchants Bank and Gansu Huangtai Wine marketing, you can compare the effects of market volatilities on China Merchants and Gansu Huangtai 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 Gansu Huangtai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Gansu Huangtai.
Diversification Opportunities for China Merchants and Gansu Huangtai
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Gansu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Gansu Huangtai Wine marketing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gansu Huangtai Wine 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 Gansu Huangtai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gansu Huangtai Wine has no effect on the direction of China Merchants i.e., China Merchants and Gansu Huangtai go up and down completely randomly.
Pair Corralation between China Merchants and Gansu Huangtai
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.23 times more return on investment than Gansu Huangtai. However, China Merchants Bank is 4.33 times less risky than Gansu Huangtai. It trades about 0.27 of its potential returns per unit of risk. Gansu Huangtai Wine marketing is currently generating about -0.15 per unit of risk. If you would invest 3,866 in China Merchants Bank on November 4, 2024 and sell it today you would earn a total of 199.00 from holding China Merchants Bank or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Gansu Huangtai Wine marketing
Performance |
| Timeline |
| China Merchants Bank |
| Gansu Huangtai Wine |
China Merchants and Gansu Huangtai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Gansu Huangtai
The main advantage of trading using opposite China Merchants and Gansu Huangtai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Gansu Huangtai 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 Gansu Huangtai will offset losses from the drop in Gansu Huangtai's long position.| China Merchants vs. China Satellite Communications | China Merchants vs. Jiangsu Phoenix Publishing | China Merchants vs. Qtone Education Group | China Merchants vs. Beijing Bewinner Communications |
| Gansu Huangtai vs. Bank of Communications | Gansu Huangtai vs. Cultural Investment Holdings | Gansu Huangtai vs. Guangxi Wuzhou Communications | Gansu Huangtai vs. Anhui Gujing Distillery |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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