Correlation Between State Grid and China Merchants
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By analyzing existing cross correlation between State Grid InformationCommunication and China Merchants Bank, you can compare the effects of market volatilities on State Grid and China Merchants 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 State Grid with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and China Merchants.
Diversification Opportunities for State Grid and China Merchants
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and China is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank and State Grid 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 State Grid InformationCommunication are associated (or correlated) with China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of State Grid i.e., State Grid and China Merchants go up and down completely randomly.
Pair Corralation between State Grid and China Merchants
Assuming the 90 days trading horizon State Grid InformationCommunication is expected to generate 3.21 times more return on investment than China Merchants. However, State Grid is 3.21 times more volatile than China Merchants Bank. It trades about 0.11 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.09 per unit of risk. If you would invest 2,040 in State Grid InformationCommunication on September 1, 2024 and sell it today you would earn a total of 182.00 from holding State Grid InformationCommunication or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Grid InformationCommunic vs. China Merchants Bank
Performance |
| Timeline |
| State Grid Informati |
| China Merchants Bank |
State Grid and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Grid and China Merchants
The main advantage of trading using opposite State Grid and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.| State Grid vs. Guangzhou KingTeller Technology | State Grid vs. Aofu Environmental Technology | State Grid vs. Guangdong Liantai Environmental | State Grid vs. Hubei Forbon Technology |
| China Merchants vs. Yunnan Jianzhijia Health Chain | China Merchants vs. Mingchen Health Co | China Merchants vs. XinJiang GuoTong Pipeline | China Merchants vs. Healthcare 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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