Correlation Between China Merchants and Anhui Jianghuai
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By analyzing existing cross correlation between China Merchants Bank and Anhui Jianghuai Automobile, you can compare the effects of market volatilities on China Merchants and Anhui Jianghuai 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 Anhui Jianghuai. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Anhui Jianghuai.
Diversification Opportunities for China Merchants and Anhui Jianghuai
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Anhui is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Anhui Jianghuai Automobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Jianghuai Auto 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 Anhui Jianghuai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Jianghuai Auto has no effect on the direction of China Merchants i.e., China Merchants and Anhui Jianghuai go up and down completely randomly.
Pair Corralation between China Merchants and Anhui Jianghuai
Assuming the 90 days trading horizon China Merchants is expected to generate 7.34 times less return on investment than Anhui Jianghuai. But when comparing it to its historical volatility, China Merchants Bank is 2.99 times less risky than Anhui Jianghuai. It trades about 0.03 of its potential returns per unit of risk. Anhui Jianghuai Automobile is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,463 in Anhui Jianghuai Automobile on October 24, 2024 and sell it today you would earn a total of 543.00 from holding Anhui Jianghuai Automobile or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Anhui Jianghuai Automobile
Performance |
| Timeline |
| China Merchants Bank |
| Anhui Jianghuai Auto |
China Merchants and Anhui Jianghuai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Anhui Jianghuai
The main advantage of trading using opposite China Merchants and Anhui Jianghuai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Anhui Jianghuai 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 Anhui Jianghuai will offset losses from the drop in Anhui Jianghuai's long position.| China Merchants vs. Dazhong Transportation Group | China Merchants vs. Guizhou BroadcastingTV Info | China Merchants vs. Postal Savings Bank | China Merchants vs. Ping An Insurance |
| Anhui Jianghuai vs. New Hope Dairy | Anhui Jianghuai vs. Dazhong Transportation Group | Anhui Jianghuai vs. Marssenger Kitchenware Co | Anhui Jianghuai vs. Sichuan Fulin Transportation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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