Correlation Between China Merchants and Huizhou Desay
Specify exactly 2 symbols:
By analyzing existing cross correlation between China Merchants Bank and Huizhou Desay SV, you can compare the effects of market volatilities on China Merchants and Huizhou Desay 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 Huizhou Desay. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Huizhou Desay.
Diversification Opportunities for China Merchants and Huizhou Desay
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Huizhou is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Huizhou Desay SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huizhou Desay SV 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 Huizhou Desay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huizhou Desay SV has no effect on the direction of China Merchants i.e., China Merchants and Huizhou Desay go up and down completely randomly.
Pair Corralation between China Merchants and Huizhou Desay
Assuming the 90 days trading horizon China Merchants is expected to generate 1.82 times less return on investment than Huizhou Desay. But when comparing it to its historical volatility, China Merchants Bank is 1.83 times less risky than Huizhou Desay. It trades about 0.23 of its potential returns per unit of risk. Huizhou Desay SV is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 10,102 in Huizhou Desay SV on November 7, 2024 and sell it today you would earn a total of 749.00 from holding Huizhou Desay SV or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Huizhou Desay SV
Performance |
| Timeline |
| China Merchants Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Huizhou Desay SV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Merchants and Huizhou Desay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Huizhou Desay
The main advantage of trading using opposite China Merchants and Huizhou Desay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Huizhou Desay 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 Huizhou Desay will offset losses from the drop in Huizhou Desay's long position.The idea behind China Merchants Bank and Huizhou Desay SV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |