Correlation Between China Merchants and Jinlong Machinery
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By analyzing existing cross correlation between China Merchants Bank and Jinlong Machinery Electronic, you can compare the effects of market volatilities on China Merchants and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Jinlong Machinery.
Diversification Opportunities for China Merchants and Jinlong Machinery
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Jinlong is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of China Merchants i.e., China Merchants and Jinlong Machinery go up and down completely randomly.
Pair Corralation between China Merchants and Jinlong Machinery
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.35 times more return on investment than Jinlong Machinery. However, China Merchants Bank is 2.85 times less risky than Jinlong Machinery. It trades about 0.07 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about -0.3 per unit of risk. If you would invest 3,860 in China Merchants Bank on October 11, 2024 and sell it today you would earn a total of 68.00 from holding China Merchants Bank or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
China Merchants Bank vs. Jinlong Machinery Electronic
Performance |
| Timeline |
| China Merchants Bank |
| Jinlong Machinery |
China Merchants and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Jinlong Machinery
The main advantage of trading using opposite China Merchants and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| China Merchants vs. Sunwave Communications Co | China Merchants vs. Runjian Communication Co | China Merchants vs. Allwin Telecommunication Co | China Merchants vs. Unisplendour Corp |
| Jinlong Machinery vs. Financial Street Holdings | Jinlong Machinery vs. Ping An Insurance | Jinlong Machinery vs. Panda Financial Holding | Jinlong Machinery vs. GRG Banking Equipment |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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