Correlation Between Liaoning Port and China Merchants
Can any of the company-specific risk be diversified away by investing in both Liaoning Port and China Merchants 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 Liaoning Port and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liaoning Port CoLtd and China Merchants Port, you can compare the effects of market volatilities on Liaoning Port 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 Liaoning Port with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Port and China Merchants.
Diversification Opportunities for Liaoning Port and China Merchants
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Liaoning and China is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Port CoLtd and China Merchants Port in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Port and Liaoning Port 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 Liaoning Port CoLtd 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 Port has no effect on the direction of Liaoning Port i.e., Liaoning Port and China Merchants go up and down completely randomly.
Pair Corralation between Liaoning Port and China Merchants
Assuming the 90 days horizon Liaoning Port is expected to generate 2.2 times less return on investment than China Merchants. But when comparing it to its historical volatility, Liaoning Port CoLtd is 1.42 times less risky than China Merchants. It trades about 0.08 of its potential returns per unit of risk. China Merchants Port is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 114.00 in China Merchants Port on November 2, 2024 and sell it today you would earn a total of 43.00 from holding China Merchants Port or generate 37.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liaoning Port CoLtd vs. China Merchants Port
Performance |
| Timeline |
| Liaoning Port CoLtd |
| China Merchants Port |
Liaoning Port and China Merchants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liaoning Port and China Merchants
The main advantage of trading using opposite Liaoning Port and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Port 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.| Liaoning Port vs. VARIOUS EATERIES LS | Liaoning Port vs. Motorcar Parts of | Liaoning Port vs. ARDAGH METAL PACDL 0001 | Liaoning Port vs. CARSALESCOM |
| China Merchants vs. Mitsui OSK Lines | China Merchants vs. Superior Plus Corp | China Merchants vs. Origin Agritech | China Merchants vs. Identiv |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |