Correlation Between China Merchants and Changsha Jingjia
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By analyzing existing cross correlation between China Merchants Bank and Changsha Jingjia Microelectronics, you can compare the effects of market volatilities on China Merchants and Changsha Jingjia 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 Changsha Jingjia. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Changsha Jingjia.
Diversification Opportunities for China Merchants and Changsha Jingjia
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Changsha is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Changsha Jingjia Microelectron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changsha Jingjia Mic 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 Changsha Jingjia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changsha Jingjia Mic has no effect on the direction of China Merchants i.e., China Merchants and Changsha Jingjia go up and down completely randomly.
Pair Corralation between China Merchants and Changsha Jingjia
Assuming the 90 days trading horizon China Merchants is expected to generate 24.44 times less return on investment than Changsha Jingjia. But when comparing it to its historical volatility, China Merchants Bank is 2.76 times less risky than Changsha Jingjia. It trades about 0.0 of its potential returns per unit of risk. Changsha Jingjia Microelectronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,045 in Changsha Jingjia Microelectronics on October 15, 2024 and sell it today you would earn a total of 2,885 from holding Changsha Jingjia Microelectronics or generate 47.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Changsha Jingjia Microelectron
Performance |
| Timeline |
| China Merchants Bank |
| Changsha Jingjia Mic |
China Merchants and Changsha Jingjia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Changsha Jingjia
The main advantage of trading using opposite China Merchants and Changsha Jingjia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Changsha Jingjia 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 Changsha Jingjia will offset losses from the drop in Changsha Jingjia's long position.| China Merchants vs. Shenzhen Zhongzhuang Construction | China Merchants vs. Huasi Agricultural Development | China Merchants vs. Gifore Agricultural Machinery | China Merchants vs. Shuhua Sports Co |
| Changsha Jingjia vs. Sunwave Communications Co | Changsha Jingjia vs. Aba Chemicals Corp | Changsha Jingjia vs. Songz Automobile Air | Changsha Jingjia vs. Beijing Kingsoft Office |
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.
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