Correlation Between China Merchants and Guangzhou Boji
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By analyzing existing cross correlation between China Merchants Bank and Guangzhou Boji Medical, you can compare the effects of market volatilities on China Merchants and Guangzhou Boji 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 Guangzhou Boji. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Guangzhou Boji.
Diversification Opportunities for China Merchants and Guangzhou Boji
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Guangzhou is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Guangzhou Boji Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Boji Medical 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 Guangzhou Boji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Boji Medical has no effect on the direction of China Merchants i.e., China Merchants and Guangzhou Boji go up and down completely randomly.
Pair Corralation between China Merchants and Guangzhou Boji
Assuming the 90 days trading horizon China Merchants is expected to generate 2.08 times less return on investment than Guangzhou Boji. But when comparing it to its historical volatility, China Merchants Bank is 2.18 times less risky than Guangzhou Boji. It trades about 0.02 of its potential returns per unit of risk. Guangzhou Boji Medical is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 899.00 in Guangzhou Boji Medical on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Guangzhou Boji Medical or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Guangzhou Boji Medical
Performance |
| Timeline |
| China Merchants Bank |
| Guangzhou Boji Medical |
China Merchants and Guangzhou Boji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Guangzhou Boji
The main advantage of trading using opposite China Merchants and Guangzhou Boji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Guangzhou Boji 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 Guangzhou Boji will offset losses from the drop in Guangzhou Boji's long position.| China Merchants vs. Uroica Mining Safety | China Merchants vs. Guangdong Silvere Sci | China Merchants vs. Cultural Investment Holdings | China Merchants vs. Metro Investment Development |
| Guangzhou Boji vs. China Life Insurance | Guangzhou Boji vs. Cinda Securities Co | Guangzhou Boji vs. Piotech Inc A | Guangzhou Boji vs. Shanghai OPM Biosciences |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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