Correlation Between Zhejiang Crystal and China Merchants
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By analyzing existing cross correlation between Zhejiang Crystal Optech and China Merchants Bank, you can compare the effects of market volatilities on Zhejiang Crystal 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 Crystal with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhejiang Crystal and China Merchants.
Diversification Opportunities for Zhejiang Crystal and China Merchants
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zhejiang and China is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Zhejiang Crystal Optech 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 Zhejiang Crystal 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 Crystal Optech 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 Zhejiang Crystal i.e., Zhejiang Crystal and China Merchants go up and down completely randomly.
Pair Corralation between Zhejiang Crystal and China Merchants
Assuming the 90 days trading horizon Zhejiang Crystal Optech is expected to generate 1.99 times more return on investment than China Merchants. However, Zhejiang Crystal is 1.99 times more volatile than China Merchants Bank. It trades about 0.27 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.2 per unit of risk. If you would invest 2,028 in Zhejiang Crystal Optech on September 24, 2024 and sell it today you would earn a total of 309.00 from holding Zhejiang Crystal Optech or generate 15.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Zhejiang Crystal Optech vs. China Merchants Bank
Performance |
Timeline |
Zhejiang Crystal Optech |
China Merchants Bank |
Zhejiang Crystal and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhejiang Crystal and China Merchants
The main advantage of trading using opposite Zhejiang Crystal and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhejiang Crystal 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.Zhejiang Crystal vs. Industrial and Commercial | Zhejiang Crystal vs. China Construction Bank | Zhejiang Crystal vs. Agricultural Bank of | Zhejiang Crystal vs. China Merchants Bank |
China Merchants vs. Kweichow Moutai Co | China Merchants vs. Contemporary Amperex Technology | China Merchants vs. G bits Network Technology | China Merchants vs. BYD Co Ltd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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