Correlation Between China Merchants and Lotus Health
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By analyzing existing cross correlation between China Merchants Bank and Lotus Health Group, you can compare the effects of market volatilities on China Merchants and Lotus Health 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 Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Lotus Health.
Diversification Opportunities for China Merchants and Lotus Health
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Lotus is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group 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 Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of China Merchants i.e., China Merchants and Lotus Health go up and down completely randomly.
Pair Corralation between China Merchants and Lotus Health
Assuming the 90 days trading horizon China Merchants is expected to generate 11.68 times less return on investment than Lotus Health. But when comparing it to its historical volatility, China Merchants Bank is 5.63 times less risky than Lotus Health. It trades about 0.03 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 493.00 in Lotus Health Group on October 25, 2024 and sell it today you would earn a total of 23.00 from holding Lotus Health Group or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Lotus Health Group
Performance |
| Timeline |
| China Merchants Bank |
| Lotus Health Group |
China Merchants and Lotus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Lotus Health
The main advantage of trading using opposite China Merchants and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.| China Merchants vs. Jilin OLED Material | China Merchants vs. Konfoong Materials International | China Merchants vs. Sichuan Hebang Biotechnology | China Merchants vs. Ningbo Tip Rubber |
| Lotus Health vs. Agricultural Bank of | Lotus Health vs. Postal Savings Bank | Lotus Health vs. Bank of Communications | Lotus Health vs. China Merchants Bank |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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