Correlation Between China Merchants and China Citic
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By analyzing existing cross correlation between China Merchants Bank and China Citic Bank, you can compare the effects of market volatilities on China Merchants and China Citic 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 China Citic. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and China Citic.
Diversification Opportunities for China Merchants and China Citic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and China is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and China Citic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Citic Bank 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 China Citic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Citic Bank has no effect on the direction of China Merchants i.e., China Merchants and China Citic go up and down completely randomly.
Pair Corralation between China Merchants and China Citic
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.8 times more return on investment than China Citic. However, China Merchants Bank is 1.24 times less risky than China Citic. It trades about 0.09 of its potential returns per unit of risk. China Citic Bank is currently generating about 0.04 per unit of risk. If you would invest 3,009 in China Merchants Bank on October 20, 2024 and sell it today you would earn a total of 1,062 from holding China Merchants Bank or generate 35.29% 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. China Citic Bank
Performance |
| Timeline |
| China Merchants Bank |
| China Citic Bank |
China Merchants and China Citic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and China Citic
The main advantage of trading using opposite China Merchants and China Citic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, China Citic 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 China Citic will offset losses from the drop in China Citic's long position.| China Merchants vs. Hengdian Entertainment Co | China Merchants vs. Duzhe Publishing Media | China Merchants vs. Sinomach Automobile Co | China Merchants vs. Nanjing Putian Telecommunications |
| China Citic vs. Winner Medical Co | China Citic vs. Duzhe Publishing Media | China Citic vs. Cowealth Medical China | China Citic vs. Xian International Medical |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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