Correlation Between Hangzhou Zhongya and China Merchants
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By analyzing existing cross correlation between Hangzhou Zhongya Machinery and China Merchants Bank, you can compare the effects of market volatilities on Hangzhou Zhongya 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 Hangzhou Zhongya with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hangzhou Zhongya and China Merchants.
Diversification Opportunities for Hangzhou Zhongya and China Merchants
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hangzhou and China is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hangzhou Zhongya Machinery 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 Hangzhou Zhongya 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 Hangzhou Zhongya Machinery 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 Hangzhou Zhongya i.e., Hangzhou Zhongya and China Merchants go up and down completely randomly.
Pair Corralation between Hangzhou Zhongya and China Merchants
Assuming the 90 days trading horizon Hangzhou Zhongya Machinery is expected to generate 1.81 times more return on investment than China Merchants. However, Hangzhou Zhongya is 1.81 times more volatile than China Merchants Bank. It trades about 0.11 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.12 per unit of risk. If you would invest 578.00 in Hangzhou Zhongya Machinery on September 24, 2024 and sell it today you would earn a total of 135.00 from holding Hangzhou Zhongya Machinery or generate 23.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Hangzhou Zhongya Machinery vs. China Merchants Bank
Performance |
Timeline |
Hangzhou Zhongya Mac |
China Merchants Bank |
Hangzhou Zhongya and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hangzhou Zhongya and China Merchants
The main advantage of trading using opposite Hangzhou Zhongya and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hangzhou Zhongya 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.Hangzhou Zhongya vs. Lonkey Industrial Co | Hangzhou Zhongya vs. Hubei Xingfa Chemicals | Hangzhou Zhongya vs. Sichuan Yahua Industrial | Hangzhou Zhongya vs. Guangdong Jingyi Metal |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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