Correlation Between China Merchants and Zhongyin Babi
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By analyzing existing cross correlation between China Merchants Bank and Zhongyin Babi Food, you can compare the effects of market volatilities on China Merchants and Zhongyin Babi 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 Zhongyin Babi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Zhongyin Babi.
Diversification Opportunities for China Merchants and Zhongyin Babi
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Zhongyin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Zhongyin Babi Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongyin Babi Food 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 Zhongyin Babi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongyin Babi Food has no effect on the direction of China Merchants i.e., China Merchants and Zhongyin Babi go up and down completely randomly.
Pair Corralation between China Merchants and Zhongyin Babi
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.56 times more return on investment than Zhongyin Babi. However, China Merchants Bank is 1.77 times less risky than Zhongyin Babi. It trades about 0.03 of its potential returns per unit of risk. Zhongyin Babi Food is currently generating about -0.19 per unit of risk. If you would invest 3,922 in China Merchants Bank on October 25, 2024 and sell it today you would earn a total of 23.00 from holding China Merchants Bank or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Zhongyin Babi Food
Performance |
| Timeline |
| China Merchants Bank |
| Zhongyin Babi Food |
China Merchants and Zhongyin Babi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Zhongyin Babi
The main advantage of trading using opposite China Merchants and Zhongyin Babi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Zhongyin Babi 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 Zhongyin Babi will offset losses from the drop in Zhongyin Babi's long position.| China Merchants vs. Jilin OLED Material | China Merchants vs. Konfoong Materials International | China Merchants vs. Sichuan Hebang Biotechnology | China Merchants vs. Ningbo Tip Rubber |
| Zhongyin Babi vs. Agricultural Bank of | Zhongyin Babi vs. Postal Savings Bank | Zhongyin Babi vs. Bank of Communications | Zhongyin Babi vs. China Merchants Bank |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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