Correlation Between China Merchants and Alpha Services
Can any of the company-specific risk be diversified away by investing in both China Merchants and Alpha Services at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Merchants and Alpha Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Merchants Bank and Alpha Services And, you can compare the effects of market volatilities on China Merchants and Alpha Services 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 Alpha Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Alpha Services.
Diversification Opportunities for China Merchants and Alpha Services
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and Alpha is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Alpha Services And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Services And 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 Alpha Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Services And has no effect on the direction of China Merchants i.e., China Merchants and Alpha Services go up and down completely randomly.
Pair Corralation between China Merchants and Alpha Services
Assuming the 90 days horizon China Merchants is expected to generate 1.94 times less return on investment than Alpha Services. In addition to that, China Merchants is 1.8 times more volatile than Alpha Services And. It trades about 0.02 of its total potential returns per unit of risk. Alpha Services And is currently generating about 0.07 per unit of volatility. If you would invest 107.00 in Alpha Services And on August 30, 2024 and sell it today you would earn a total of 62.00 from holding Alpha Services And or generate 57.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.19% |
| Values | Daily Returns |
China Merchants Bank vs. Alpha Services And
Performance |
| Timeline |
| China Merchants Bank |
| Alpha Services And |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Merchants and Alpha Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Alpha Services
The main advantage of trading using opposite China Merchants and Alpha Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Alpha Services 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 Alpha Services will offset losses from the drop in Alpha Services' long position.| China Merchants vs. China Everbright Bank | China Merchants vs. Postal Savings Bank | China Merchants vs. China Citic Bank | China Merchants vs. China Merchants Bank |
| Alpha Services vs. Bankinter SA ADR | Alpha Services vs. CaixaBank SA | Alpha Services vs. First Horizon | Alpha Services vs. JAPAN POST BANK |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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