Correlation Between Harbin Air and China Merchants
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By analyzing existing cross correlation between Harbin Air Conditioning and China Merchants Bank, you can compare the effects of market volatilities on Harbin Air 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 Harbin Air with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbin Air and China Merchants.
Diversification Opportunities for Harbin Air and China Merchants
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Harbin and China is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Harbin Air Conditioning 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 Harbin Air 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 Harbin Air Conditioning 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 Harbin Air i.e., Harbin Air and China Merchants go up and down completely randomly.
Pair Corralation between Harbin Air and China Merchants
Assuming the 90 days trading horizon Harbin Air Conditioning is expected to under-perform the China Merchants. In addition to that, Harbin Air is 4.86 times more volatile than China Merchants Bank. It trades about -0.02 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.12 per unit of volatility. If you would invest 3,962 in China Merchants Bank on October 30, 2024 and sell it today you would earn a total of 103.00 from holding China Merchants Bank or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbin Air Conditioning vs. China Merchants Bank
Performance |
| Timeline |
| Harbin Air Conditioning |
| China Merchants Bank |
Harbin Air and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbin Air and China Merchants
The main advantage of trading using opposite Harbin Air and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbin Air 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.| Harbin Air vs. Ming Yang Smart | Harbin Air vs. 159681 | Harbin Air vs. 159005 | Harbin Air vs. Loctek Ergonomic Technology |
| China Merchants vs. Tongling Nonferrous Metals | China Merchants vs. Guangdong Jingyi Metal | China Merchants vs. China Aluminum International | China Merchants vs. Pengxin International Mining |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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