Correlation Between GEM and China Marine
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By analyzing existing cross correlation between GEM Co and China Marine Information, you can compare the effects of market volatilities on GEM and China Marine 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 GEM with a short position of China Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEM and China Marine.
Diversification Opportunities for GEM and China Marine
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEM and China is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GEM Co and China Marine Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Marine Information and GEM 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 GEM Co are associated (or correlated) with China Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Marine Information has no effect on the direction of GEM i.e., GEM and China Marine go up and down completely randomly.
Pair Corralation between GEM and China Marine
Assuming the 90 days trading horizon GEM Co is expected to under-perform the China Marine. But the stock apears to be less risky and, when comparing its historical volatility, GEM Co is 1.3 times less risky than China Marine. The stock trades about 0.0 of its potential returns per unit of risk. The China Marine Information is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,341 in China Marine Information on September 26, 2024 and sell it today you would earn a total of 573.00 from holding China Marine Information or generate 24.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
GEM Co vs. China Marine Information
Performance |
Timeline |
GEM Co |
China Marine Information |
GEM and China Marine Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GEM and China Marine
The main advantage of trading using opposite GEM and China Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEM position performs unexpectedly, China Marine 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 Marine will offset losses from the drop in China Marine's long position.GEM vs. Zijin Mining Group | GEM vs. Wanhua Chemical Group | GEM vs. Baoshan Iron Steel | GEM vs. Shandong Gold Mining |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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