Correlation Between China Merchants and Beijing Bewinner
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By analyzing existing cross correlation between China Merchants Bank and Beijing Bewinner Communications, you can compare the effects of market volatilities on China Merchants and Beijing Bewinner 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 Beijing Bewinner. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Beijing Bewinner.
Diversification Opportunities for China Merchants and Beijing Bewinner
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Beijing is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Beijing Bewinner Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Bewinner Com 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 Beijing Bewinner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Bewinner Com has no effect on the direction of China Merchants i.e., China Merchants and Beijing Bewinner go up and down completely randomly.
Pair Corralation between China Merchants and Beijing Bewinner
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Beijing Bewinner. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 2.34 times less risky than Beijing Bewinner. The stock trades about -0.21 of its potential returns per unit of risk. The Beijing Bewinner Communications is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 596.00 in Beijing Bewinner Communications on August 28, 2024 and sell it today you would earn a total of 15.00 from holding Beijing Bewinner Communications or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Beijing Bewinner Communication
Performance |
| Timeline |
| China Merchants Bank |
| Beijing Bewinner Com |
China Merchants and Beijing Bewinner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Beijing Bewinner
The main advantage of trading using opposite China Merchants and Beijing Bewinner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Beijing Bewinner 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 Beijing Bewinner will offset losses from the drop in Beijing Bewinner's long position.| China Merchants vs. Oppein Home Group | China Merchants vs. Xiamen Goldenhome Co | China Merchants vs. Hubei Geoway Investment | China Merchants vs. Harbin Hatou Investment |
| Beijing Bewinner vs. Der International Home | Beijing Bewinner vs. Shanghai CEO Environmental | Beijing Bewinner vs. Xiamen Goldenhome Co | Beijing Bewinner vs. Huaxia Fund Management |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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