Correlation Between China Merchants and Banco Del
Can any of the company-specific risk be diversified away by investing in both China Merchants and Banco Del 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 Banco Del 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 Banco del Bajo, you can compare the effects of market volatilities on China Merchants and Banco Del 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 Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Banco Del.
Diversification Opportunities for China Merchants and Banco Del
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Banco is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo 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 Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of China Merchants i.e., China Merchants and Banco Del go up and down completely randomly.
Pair Corralation between China Merchants and Banco Del
If you would invest 470.00 in China Merchants Bank on September 1, 2024 and sell it today you would earn a total of 0.00 from holding China Merchants Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 33.33% |
| Values | Daily Returns |
China Merchants Bank vs. Banco del Bajo
Performance |
| Timeline |
| China Merchants Bank |
| Banco del Bajo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
China Merchants and Banco Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Banco Del
The main advantage of trading using opposite China Merchants and Banco Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Banco Del 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 Banco Del will offset losses from the drop in Banco Del's 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 |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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