Correlation Between Gotion High and China Merchants
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By analyzing existing cross correlation between Gotion High tech and China Merchants Bank, you can compare the effects of market volatilities on Gotion High 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 Gotion High with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gotion High and China Merchants.
Diversification Opportunities for Gotion High and China Merchants
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gotion and China is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Gotion High tech 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 Gotion High 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 Gotion High tech 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 Gotion High i.e., Gotion High and China Merchants go up and down completely randomly.
Pair Corralation between Gotion High and China Merchants
Assuming the 90 days trading horizon Gotion High tech is expected to under-perform the China Merchants. In addition to that, Gotion High is 1.81 times more volatile than China Merchants Bank. It trades about -0.13 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.05 per unit of volatility. If you would invest 3,743 in China Merchants Bank on September 22, 2024 and sell it today you would earn a total of 48.00 from holding China Merchants Bank or generate 1.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.65% |
Values | Daily Returns |
Gotion High tech vs. China Merchants Bank
Performance |
Timeline |
Gotion High tech |
China Merchants Bank |
Gotion High and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gotion High and China Merchants
The main advantage of trading using opposite Gotion High and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gotion High 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.Gotion High vs. Industrial and Commercial | Gotion High vs. Agricultural Bank of | Gotion High vs. China Construction Bank | Gotion High vs. Bank of China |
China Merchants vs. Northking Information Technology | China Merchants vs. Youyou Foods Co | China Merchants vs. Namchow Food Group | China Merchants vs. Great Sun Foods 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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