Correlation Between Hubei Geoway and China Merchants
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By analyzing existing cross correlation between Hubei Geoway Investment and China Merchants Bank, you can compare the effects of market volatilities on Hubei Geoway 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 Hubei Geoway with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Geoway and China Merchants.
Diversification Opportunities for Hubei Geoway and China Merchants
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hubei and China is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Geoway Investment 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 Hubei Geoway 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 Hubei Geoway Investment 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 Hubei Geoway i.e., Hubei Geoway and China Merchants go up and down completely randomly.
Pair Corralation between Hubei Geoway and China Merchants
Assuming the 90 days trading horizon Hubei Geoway Investment is expected to generate 2.52 times more return on investment than China Merchants. However, Hubei Geoway is 2.52 times more volatile than China Merchants Bank. It trades about 0.02 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.21 per unit of risk. If you would invest 147.00 in Hubei Geoway Investment on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Hubei Geoway Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hubei Geoway Investment vs. China Merchants Bank
Performance |
| Timeline |
| Hubei Geoway Investment |
| China Merchants Bank |
Hubei Geoway and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hubei Geoway and China Merchants
The main advantage of trading using opposite Hubei Geoway and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hubei Geoway 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.| Hubei Geoway vs. Zijin Mining Group | Hubei Geoway vs. Wanhua Chemical Group | Hubei Geoway vs. Baoshan Iron Steel | Hubei Geoway vs. Shandong Gold Mining |
| China Merchants vs. Oppein Home Group | China Merchants vs. Xiamen Goldenhome Co | China Merchants vs. Hubei Geoway Investment | China Merchants vs. Harbin Hatou 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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