Correlation Between China Merchants and Zhejiang Huayou
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By analyzing existing cross correlation between China Merchants Bank and Zhejiang Huayou Cobalt, you can compare the effects of market volatilities on China Merchants and Zhejiang Huayou 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 Zhejiang Huayou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Zhejiang Huayou.
Diversification Opportunities for China Merchants and Zhejiang Huayou
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Zhejiang is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Zhejiang Huayou Cobalt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huayou Cobalt 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 Zhejiang Huayou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huayou Cobalt has no effect on the direction of China Merchants i.e., China Merchants and Zhejiang Huayou go up and down completely randomly.
Pair Corralation between China Merchants and Zhejiang Huayou
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.58 times more return on investment than Zhejiang Huayou. However, China Merchants Bank is 1.72 times less risky than Zhejiang Huayou. It trades about 0.0 of its potential returns per unit of risk. Zhejiang Huayou Cobalt is currently generating about -0.05 per unit of risk. If you would invest 3,983 in China Merchants Bank on October 16, 2024 and sell it today you would lose (76.00) from holding China Merchants Bank or give up 1.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Zhejiang Huayou Cobalt
Performance |
| Timeline |
| China Merchants Bank |
| Zhejiang Huayou Cobalt |
China Merchants and Zhejiang Huayou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Zhejiang Huayou
The main advantage of trading using opposite China Merchants and Zhejiang Huayou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Zhejiang Huayou 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 Zhejiang Huayou will offset losses from the drop in Zhejiang Huayou's long position.| China Merchants vs. Shenzhen Zhongzhuang Construction | China Merchants vs. Huasi Agricultural Development | China Merchants vs. Gifore Agricultural Machinery | China Merchants vs. Shuhua Sports Co |
| Zhejiang Huayou vs. Zijin Mining Group | Zhejiang Huayou vs. Wanhua Chemical Group | Zhejiang Huayou vs. Baoshan Iron Steel | Zhejiang Huayou vs. Shandong Gold Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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