Correlation Between China Merchants and Dongguan Tarry
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By analyzing existing cross correlation between China Merchants Bank and Dongguan Tarry Electronics, you can compare the effects of market volatilities on China Merchants and Dongguan Tarry 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 Dongguan Tarry. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Dongguan Tarry.
Diversification Opportunities for China Merchants and Dongguan Tarry
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Dongguan is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Dongguan Tarry Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Tarry Elect 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 Dongguan Tarry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Tarry Elect has no effect on the direction of China Merchants i.e., China Merchants and Dongguan Tarry go up and down completely randomly.
Pair Corralation between China Merchants and Dongguan Tarry
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Dongguan Tarry. But the stock apears to be less risky and, when comparing its historical volatility, China Merchants Bank is 2.0 times less risky than Dongguan Tarry. The stock trades about -0.23 of its potential returns per unit of risk. The Dongguan Tarry Electronics is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,859 in Dongguan Tarry Electronics on September 4, 2024 and sell it today you would earn a total of 290.00 from holding Dongguan Tarry Electronics or generate 4.95% 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. Dongguan Tarry Electronics
Performance |
| Timeline |
| China Merchants Bank |
| Dongguan Tarry Elect |
China Merchants and Dongguan Tarry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Dongguan Tarry
The main advantage of trading using opposite China Merchants and Dongguan Tarry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Dongguan Tarry 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 Dongguan Tarry will offset losses from the drop in Dongguan Tarry's long position.| China Merchants vs. Dymatic Chemicals | China Merchants vs. JCHX Mining Management | China Merchants vs. Zijin Mining Group | China Merchants vs. Jinhui Mining Co |
| Dongguan Tarry vs. Bank of China | Dongguan Tarry vs. Kweichow Moutai Co | Dongguan Tarry vs. PetroChina Co Ltd | Dongguan Tarry vs. Bank of Communications |
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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