Correlation Between China Merchants and Zoje Resources
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By analyzing existing cross correlation between China Merchants Bank and Zoje Resources Investment, you can compare the effects of market volatilities on China Merchants and Zoje Resources 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 Zoje Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Zoje Resources.
Diversification Opportunities for China Merchants and Zoje Resources
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Zoje is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Zoje Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoje Resources Investment 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 Zoje Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoje Resources Investment has no effect on the direction of China Merchants i.e., China Merchants and Zoje Resources go up and down completely randomly.
Pair Corralation between China Merchants and Zoje Resources
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Zoje Resources. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 3.55 times less risky than Zoje Resources. The stock trades about -0.18 of its potential returns per unit of risk. The Zoje Resources Investment is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 224.00 in Zoje Resources Investment on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Zoje Resources Investment or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Zoje Resources Investment
Performance |
| Timeline |
| China Merchants Bank |
| Zoje Resources Investment |
China Merchants and Zoje Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Zoje Resources
The main advantage of trading using opposite China Merchants and Zoje Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Zoje Resources 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 Zoje Resources will offset losses from the drop in Zoje Resources' long position.| China Merchants vs. Songz Automobile Air | China Merchants vs. Nanjing Putian Telecommunications | China Merchants vs. State Grid InformationCommunication | China Merchants vs. Ciwen Media Co |
| Zoje Resources vs. Biwin Storage Technology | Zoje Resources vs. PetroChina Co Ltd | Zoje Resources vs. Industrial and Commercial | Zoje Resources vs. China Construction Bank |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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