Correlation Between China Merchants and Jiangsu Jinling
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By analyzing existing cross correlation between China Merchants Bank and Jiangsu Jinling Sports, you can compare the effects of market volatilities on China Merchants and Jiangsu Jinling 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 Jiangsu Jinling. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Jiangsu Jinling.
Diversification Opportunities for China Merchants and Jiangsu Jinling
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Jiangsu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Jiangsu Jinling Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiangsu Jinling Sports 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 Jiangsu Jinling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiangsu Jinling Sports has no effect on the direction of China Merchants i.e., China Merchants and Jiangsu Jinling go up and down completely randomly.
Pair Corralation between China Merchants and Jiangsu Jinling
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Jiangsu Jinling. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 1.56 times less risky than Jiangsu Jinling. The stock trades about -0.24 of its potential returns per unit of risk. The Jiangsu Jinling Sports is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,368 in Jiangsu Jinling Sports on August 25, 2024 and sell it today you would lose (7.00) from holding Jiangsu Jinling Sports or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Merchants Bank vs. Jiangsu Jinling Sports
Performance |
| Timeline |
| China Merchants Bank |
| Jiangsu Jinling Sports |
China Merchants and Jiangsu Jinling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Jiangsu Jinling
The main advantage of trading using opposite China Merchants and Jiangsu Jinling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Jiangsu Jinling 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 Jiangsu Jinling will offset losses from the drop in Jiangsu Jinling's long position.| China Merchants vs. Jiangxi Hengda Hi Tech | China Merchants vs. Fiberhome Telecommunication Technologies | China Merchants vs. Wuhan Yangtze Communication | China Merchants vs. Tongyu Communication |
| Jiangsu Jinling vs. Western Metal Materials | Jiangsu Jinling vs. Dalian Thermal Power | Jiangsu Jinling vs. Shanghai Yanpu Metal | Jiangsu Jinling vs. China Publishing Media |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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