Correlation Between China Merchants and Impulse Qingdao
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By analyzing existing cross correlation between China Merchants Bank and Impulse Qingdao Health, you can compare the effects of market volatilities on China Merchants and Impulse Qingdao 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 Impulse Qingdao. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Impulse Qingdao.
Diversification Opportunities for China Merchants and Impulse Qingdao
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Impulse is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Impulse Qingdao Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impulse Qingdao Health 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 Impulse Qingdao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impulse Qingdao Health has no effect on the direction of China Merchants i.e., China Merchants and Impulse Qingdao go up and down completely randomly.
Pair Corralation between China Merchants and Impulse Qingdao
Assuming the 90 days trading horizon China Merchants is expected to generate 5.07 times less return on investment than Impulse Qingdao. But when comparing it to its historical volatility, China Merchants Bank is 1.89 times less risky than Impulse Qingdao. It trades about 0.02 of its potential returns per unit of risk. Impulse Qingdao Health is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,318 in Impulse Qingdao Health on August 29, 2024 and sell it today you would earn a total of 748.00 from holding Impulse Qingdao Health or generate 56.75% 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. Impulse Qingdao Health
Performance |
| Timeline |
| China Merchants Bank |
| Impulse Qingdao Health |
China Merchants and Impulse Qingdao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Impulse Qingdao
The main advantage of trading using opposite China Merchants and Impulse Qingdao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Impulse Qingdao 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 Impulse Qingdao will offset losses from the drop in Impulse Qingdao's 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 |
| Impulse Qingdao vs. Jiangsu Jinling Sports | Impulse Qingdao vs. Malion New Materials | Impulse Qingdao vs. Citic Guoan Wine | Impulse Qingdao vs. Sinosteel Luonai Materials |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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