Correlation Between China Merchants and Shanghai Jin
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By analyzing existing cross correlation between China Merchants Bank and Shanghai Jin Jiang, you can compare the effects of market volatilities on China Merchants and Shanghai Jin 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 Shanghai Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Shanghai Jin.
Diversification Opportunities for China Merchants and Shanghai Jin
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Shanghai is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Shanghai Jin Jiang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Jin Jiang 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 Shanghai Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Jin Jiang has no effect on the direction of China Merchants i.e., China Merchants and Shanghai Jin go up and down completely randomly.
Pair Corralation between China Merchants and Shanghai Jin
Assuming the 90 days trading horizon China Merchants Bank is expected to generate 0.82 times more return on investment than Shanghai Jin. However, China Merchants Bank is 1.22 times less risky than Shanghai Jin. It trades about 0.05 of its potential returns per unit of risk. Shanghai Jin Jiang is currently generating about 0.0 per unit of risk. If you would invest 3,258 in China Merchants Bank on September 26, 2024 and sell it today you would earn a total of 664.00 from holding China Merchants Bank or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.66% |
| Values | Daily Returns |
China Merchants Bank vs. Shanghai Jin Jiang
Performance |
| Timeline |
| China Merchants Bank |
| Shanghai Jin Jiang |
China Merchants and Shanghai Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Shanghai Jin
The main advantage of trading using opposite China Merchants and Shanghai Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Shanghai Jin 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 Shanghai Jin will offset losses from the drop in Shanghai Jin's long position.| China Merchants vs. Kweichow Moutai Co | China Merchants vs. Contemporary Amperex Technology | China Merchants vs. G bits Network Technology | China Merchants vs. BYD Co Ltd |
| Shanghai Jin vs. Bank of China | Shanghai Jin vs. Kweichow Moutai Co | Shanghai Jin vs. PetroChina Co Ltd | Shanghai Jin vs. Bank of Communications |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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