Correlation Between China Merchants and Ciwen Media
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By analyzing existing cross correlation between China Merchants Bank and Ciwen Media Co, you can compare the effects of market volatilities on China Merchants and Ciwen Media 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 Ciwen Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Ciwen Media.
Diversification Opportunities for China Merchants and Ciwen Media
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Ciwen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Ciwen Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciwen Media 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 Ciwen Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciwen Media has no effect on the direction of China Merchants i.e., China Merchants and Ciwen Media go up and down completely randomly.
Pair Corralation between China Merchants and Ciwen Media
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Ciwen Media. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 3.08 times less risky than Ciwen Media. The stock trades about -0.09 of its potential returns per unit of risk. The Ciwen Media Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 679.00 in Ciwen Media Co on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Ciwen Media Co or generate 10.46% 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. Ciwen Media Co
Performance |
| Timeline |
| China Merchants Bank |
| Ciwen Media |
China Merchants and Ciwen Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Ciwen Media
The main advantage of trading using opposite China Merchants and Ciwen Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Ciwen Media 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 Ciwen Media will offset losses from the drop in Ciwen Media's long position.| China Merchants vs. Yunnan Jianzhijia Health Chain | China Merchants vs. Mingchen Health Co | China Merchants vs. XinJiang GuoTong Pipeline | China Merchants vs. Healthcare Co |
| Ciwen Media vs. Lutian Machinery Co | Ciwen Media vs. China Longyuan Power | Ciwen Media vs. PetroChina Co Ltd | Ciwen Media vs. Bank of China |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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