Correlation Between China Merchants and Guilin Seamild
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By analyzing existing cross correlation between China Merchants Bank and Guilin Seamild Foods, you can compare the effects of market volatilities on China Merchants and Guilin Seamild 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 Guilin Seamild. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Guilin Seamild.
Diversification Opportunities for China Merchants and Guilin Seamild
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Guilin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Guilin Seamild Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guilin Seamild Foods 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 Guilin Seamild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guilin Seamild Foods has no effect on the direction of China Merchants i.e., China Merchants and Guilin Seamild go up and down completely randomly.
Pair Corralation between China Merchants and Guilin Seamild
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.47 times more return on investment than Guilin Seamild. However, China Merchants Bank is 2.14 times less risky than Guilin Seamild. It trades about 0.27 of its potential returns per unit of risk. Guilin Seamild Foods is currently generating about -0.03 per unit of risk. If you would invest 3,866 in China Merchants Bank on November 4, 2024 and sell it today you would earn a total of 199.00 from holding China Merchants Bank or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Guilin Seamild Foods
Performance |
| Timeline |
| China Merchants Bank |
| Guilin Seamild Foods |
China Merchants and Guilin Seamild Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Guilin Seamild
The main advantage of trading using opposite China Merchants and Guilin Seamild positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Guilin Seamild 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 Guilin Seamild will offset losses from the drop in Guilin Seamild's long position.| China Merchants vs. China Satellite Communications | China Merchants vs. Jiangsu Phoenix Publishing | China Merchants vs. Qtone Education Group | China Merchants vs. Beijing Bewinner Communications |
| Guilin Seamild vs. Sportsoul Co Ltd | Guilin Seamild vs. Ningbo Ligong Online | Guilin Seamild vs. Hubeiyichang Transportation Group | Guilin Seamild vs. Lander Sports Development |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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