Correlation Between China Merchants and Chongqing Gas
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By analyzing existing cross correlation between China Merchants Bank and Chongqing Gas Grp, you can compare the effects of market volatilities on China Merchants and Chongqing Gas 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 Chongqing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Chongqing Gas.
Diversification Opportunities for China Merchants and Chongqing Gas
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Chongqing is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Chongqing Gas Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Gas Grp 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 Chongqing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Gas Grp has no effect on the direction of China Merchants i.e., China Merchants and Chongqing Gas go up and down completely randomly.
Pair Corralation between China Merchants and Chongqing Gas
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.94 times more return on investment than Chongqing Gas. However, China Merchants Bank is 1.07 times less risky than Chongqing Gas. It trades about 0.08 of its potential returns per unit of risk. Chongqing Gas Grp is currently generating about 0.02 per unit of risk. If you would invest 3,131 in China Merchants Bank on November 3, 2024 and sell it today you would earn a total of 934.00 from holding China Merchants Bank or generate 29.83% 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. Chongqing Gas Grp
Performance |
| Timeline |
| China Merchants Bank |
| Chongqing Gas Grp |
China Merchants and Chongqing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Chongqing Gas
The main advantage of trading using opposite China Merchants and Chongqing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Chongqing Gas 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 Chongqing Gas will offset losses from the drop in Chongqing Gas' long position.| China Merchants vs. Thinkon Semiconductor Jinzhou | China Merchants vs. Linzhou Heavy Machinery | China Merchants vs. Anhui Huilong Agricultural | China Merchants vs. Shantui Construction Machinery |
| Chongqing Gas vs. Shengda Mining Co | Chongqing Gas vs. Quectel Wireless Solutions | Chongqing Gas vs. JCHX Mining Management | Chongqing Gas vs. Nanxing Furniture Machinery |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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