Correlation Between China Merchants and Industrial
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By analyzing existing cross correlation between China Merchants Bank and Industrial and Commercial, you can compare the effects of market volatilities on China Merchants and Industrial 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 Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Industrial.
Diversification Opportunities for China Merchants and Industrial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Industrial is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Industrial and Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial and Commercial 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 Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial and Commercial has no effect on the direction of China Merchants i.e., China Merchants and Industrial go up and down completely randomly.
Pair Corralation between China Merchants and Industrial
Assuming the 90 days trading horizon China Merchants Bank is expected to under-perform the Industrial. In addition to that, China Merchants is 1.45 times more volatile than Industrial and Commercial. It trades about -0.2 of its total potential returns per unit of risk. Industrial and Commercial is currently generating about 0.0 per unit of volatility. If you would invest 614.00 in Industrial and Commercial on August 24, 2024 and sell it today you would lose (1.00) from holding Industrial and Commercial or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Industrial and Commercial
Performance |
| Timeline |
| China Merchants Bank |
| Industrial and Commercial |
China Merchants and Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Industrial
The main advantage of trading using opposite China Merchants and Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Industrial 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 Industrial will offset losses from the drop in Industrial's long position.| China Merchants vs. Dymatic Chemicals | China Merchants vs. Semiconductor Manufacturing Electronics | China Merchants vs. Double Medical Technology | China Merchants vs. CareRay Digital Medical |
| Industrial vs. Jiangsu Financial Leasing | Industrial vs. Ningbo Tech Bank Co | Industrial vs. Zhonghong Pulin Medical | Industrial vs. Zhende Medical Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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