Correlation Between Zhejiang Construction and China Merchants
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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
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhejiang and China is 0.48. 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 under-perform the China Merchants. In addition to that, Zhejiang Construction is 1.12 times more volatile than China Merchants Shekou. It trades about -0.05 of its total potential returns per unit of risk. China Merchants Shekou is currently generating about 0.0 per unit of volatility. If you would invest 1,287 in China Merchants Shekou on September 25, 2024 and sell it today you would lose (249.00) from holding China Merchants Shekou or give up 19.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.79% |
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.Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. China Construction Bank | Zhejiang Construction vs. Bank of China |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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