Correlation Between China Merchants and Guangdong Marubi
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By analyzing existing cross correlation between China Merchants Bank and Guangdong Marubi Biotechnology, you can compare the effects of market volatilities on China Merchants and Guangdong Marubi 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 Guangdong Marubi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Guangdong Marubi.
Diversification Opportunities for China Merchants and Guangdong Marubi
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangdong is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Guangdong Marubi Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Marubi Bio 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 Guangdong Marubi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Marubi Bio has no effect on the direction of China Merchants i.e., China Merchants and Guangdong Marubi go up and down completely randomly.
Pair Corralation between China Merchants and Guangdong Marubi
Assuming the 90 days trading horizon China Merchants is expected to generate 1.08 times less return on investment than Guangdong Marubi. But when comparing it to its historical volatility, China Merchants Bank is 1.93 times less risky than Guangdong Marubi. It trades about 0.27 of its potential returns per unit of risk. Guangdong Marubi Biotechnology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,132 in Guangdong Marubi Biotechnology on November 4, 2024 and sell it today you would earn a total of 167.00 from holding Guangdong Marubi Biotechnology or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Guangdong Marubi Biotechnology
Performance |
| Timeline |
| China Merchants Bank |
| Guangdong Marubi Bio |
China Merchants and Guangdong Marubi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Guangdong Marubi
The main advantage of trading using opposite China Merchants and Guangdong Marubi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Guangdong Marubi 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 Guangdong Marubi will offset losses from the drop in Guangdong Marubi's long position.| China Merchants vs. China Satellite Communications | China Merchants vs. Jiangsu Phoenix Publishing | China Merchants vs. Qtone Education Group | China Merchants vs. Beijing Bewinner Communications |
| Guangdong Marubi vs. Hua Xia Bank | Guangdong Marubi vs. Xiangpiaopiao Food Co | Guangdong Marubi vs. HaiXin Foods Co | Guangdong Marubi vs. JuneYao Dairy 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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