Correlation Between China Merchants and Tangshan Port
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By analyzing existing cross correlation between China Merchants Bank and Tangshan Port Group, you can compare the effects of market volatilities on China Merchants and Tangshan Port 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 Tangshan Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Tangshan Port.
Diversification Opportunities for China Merchants and Tangshan Port
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Tangshan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Tangshan Port Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tangshan Port 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 Tangshan Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tangshan Port Group has no effect on the direction of China Merchants i.e., China Merchants and Tangshan Port go up and down completely randomly.
Pair Corralation between China Merchants and Tangshan Port
Assuming the 90 days trading horizon China Merchants is expected to generate 59.5 times less return on investment than Tangshan Port. But when comparing it to its historical volatility, China Merchants Bank is 1.24 times less risky than Tangshan Port. It trades about 0.0 of its potential returns per unit of risk. Tangshan Port Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 435.00 in Tangshan Port Group on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Tangshan Port Group or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Tangshan Port Group
Performance |
| Timeline |
| China Merchants Bank |
| Tangshan Port Group |
China Merchants and Tangshan Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Tangshan Port
The main advantage of trading using opposite China Merchants and Tangshan Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Tangshan Port 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 Tangshan Port will offset losses from the drop in Tangshan Port's long position.| China Merchants vs. Qilu Bank Co | China Merchants vs. Postal Savings Bank | China Merchants vs. Bank of Suzhou | China Merchants vs. Western Metal Materials |
| Tangshan Port vs. Beijing SPC Environment | Tangshan Port vs. Gansu Jiu Steel | Tangshan Port vs. Shanghai Broadband Technology | Tangshan Port vs. Silkroad Visual Technology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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