Correlation Between China Merchants and Fujian Anjoy
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By analyzing existing cross correlation between China Merchants Bank and Fujian Anjoy Foods, you can compare the effects of market volatilities on China Merchants and Fujian Anjoy 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 Fujian Anjoy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Fujian Anjoy.
Diversification Opportunities for China Merchants and Fujian Anjoy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between China and Fujian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Fujian Anjoy Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Anjoy Foods 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 Fujian Anjoy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Anjoy Foods has no effect on the direction of China Merchants i.e., China Merchants and Fujian Anjoy go up and down completely randomly.
Pair Corralation between China Merchants and Fujian Anjoy
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.59 times more return on investment than Fujian Anjoy. However, China Merchants Bank is 1.69 times less risky than Fujian Anjoy. It trades about 0.05 of its potential returns per unit of risk. Fujian Anjoy Foods is currently generating about -0.05 per unit of risk. If you would invest 3,169 in China Merchants Bank on September 12, 2024 and sell it today you would earn a total of 691.00 from holding China Merchants Bank or generate 21.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Fujian Anjoy Foods
Performance |
| Timeline |
| China Merchants Bank |
| Fujian Anjoy Foods |
China Merchants and Fujian Anjoy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Fujian Anjoy
The main advantage of trading using opposite China Merchants and Fujian Anjoy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Fujian Anjoy 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 Fujian Anjoy will offset losses from the drop in Fujian Anjoy'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 |
| Fujian Anjoy vs. China Petroleum Chemical | Fujian Anjoy vs. PetroChina Co Ltd | Fujian Anjoy vs. China State Construction | Fujian Anjoy vs. China Railway Group |
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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