Correlation Between China Merchants and Guangdong Skychem
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By analyzing existing cross correlation between China Merchants Bank and Guangdong Skychem Technology, you can compare the effects of market volatilities on China Merchants and Guangdong Skychem 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 Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Guangdong Skychem.
Diversification Opportunities for China Merchants and Guangdong Skychem
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Guangdong is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of China Merchants i.e., China Merchants and Guangdong Skychem go up and down completely randomly.
Pair Corralation between China Merchants and Guangdong Skychem
Assuming the 90 days trading horizon China Merchants is expected to generate 27.0 times less return on investment than Guangdong Skychem. But when comparing it to its historical volatility, China Merchants Bank is 2.89 times less risky than Guangdong Skychem. It trades about 0.0 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,452 in Guangdong Skychem Technology on October 16, 2024 and sell it today you would earn a total of 2,568 from holding Guangdong Skychem Technology or generate 47.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 77.62% |
| Values | Daily Returns |
China Merchants Bank vs. Guangdong Skychem Technology
Performance |
| Timeline |
| China Merchants Bank |
| Guangdong Skychem |
China Merchants and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Guangdong Skychem
The main advantage of trading using opposite China Merchants and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Guangdong Skychem 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 Skychem will offset losses from the drop in Guangdong Skychem'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 |
| Guangdong Skychem vs. Kunwu Jiuding Investment | Guangdong Skychem vs. Xiandai Investment Co | Guangdong Skychem vs. Hubei Geoway Investment | Guangdong Skychem vs. Henan Shuanghui Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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