Correlation Between Zhejiang Construction and China Merchants
Specify exactly 2 symbols:
By analyzing existing cross correlation between Zhejiang Construction Investment and China Merchants Shekou, you can compare the effects of market volatilities on Zhejiang Construction 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 Zhejiang Construction with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Construction and China Merchants.
Diversification Opportunities for Zhejiang Construction and China Merchants
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhejiang and China is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Construction Investme and China Merchants Shekou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Shekou and Zhejiang Construction 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 Zhejiang Construction 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 Shekou has no effect on the direction of Zhejiang Construction i.e., Zhejiang Construction and China Merchants go up and down completely randomly.
Pair Corralation between Zhejiang Construction and China Merchants
Assuming the 90 days trading horizon Zhejiang Construction Investment is expected to generate 1.21 times more return on investment than China Merchants. However, Zhejiang Construction is 1.21 times more volatile than China Merchants Shekou. It trades about 0.09 of its potential returns per unit of risk. China Merchants Shekou is currently generating about 0.07 per unit of risk. If you would invest 779.00 in Zhejiang Construction Investment on September 24, 2024 and sell it today you would earn a total of 149.00 from holding Zhejiang Construction Investment or generate 19.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Zhejiang Construction Investme vs. China Merchants Shekou
Performance |
Timeline |
Zhejiang Construction |
China Merchants Shekou |
Zhejiang Construction and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Construction and China Merchants
The main advantage of trading using opposite Zhejiang Construction and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Construction 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.The idea behind Zhejiang Construction Investment and China Merchants Shekou pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
China Merchants vs. Tieling Newcity Investment | China Merchants vs. Zhejiang Construction Investment | China Merchants vs. Jilin Jlu Communication | China Merchants vs. Eastern Communications Co |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |