Correlation Between China Merchants and Penyao Environmental
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By analyzing existing cross correlation between China Merchants Bank and Penyao Environmental Protection, you can compare the effects of market volatilities on China Merchants and Penyao Environmental 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 Penyao Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Penyao Environmental.
Diversification Opportunities for China Merchants and Penyao Environmental
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Penyao is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Penyao Environmental Protectio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penyao Environmental 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 Penyao Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penyao Environmental has no effect on the direction of China Merchants i.e., China Merchants and Penyao Environmental go up and down completely randomly.
Pair Corralation between China Merchants and Penyao Environmental
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.58 times more return on investment than Penyao Environmental. However, China Merchants Bank is 1.71 times less risky than Penyao Environmental. It trades about 0.08 of its potential returns per unit of risk. Penyao Environmental Protection is currently generating about 0.04 per unit of risk. If you would invest 3,131 in China Merchants Bank on December 3, 2024 and sell it today you would earn a total of 1,074 from holding China Merchants Bank or generate 34.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Penyao Environmental Protectio
Performance |
| Timeline |
| China Merchants Bank |
| Penyao Environmental |
China Merchants and Penyao Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Penyao Environmental
The main advantage of trading using opposite China Merchants and Penyao Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Penyao Environmental 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 Penyao Environmental will offset losses from the drop in Penyao Environmental's long position.| China Merchants vs. Thunder Software Technology | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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