Correlation Between Rongcheer Industrial and China Merchants
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By analyzing existing cross correlation between Rongcheer Industrial Technology and China Merchants Bank, you can compare the effects of market volatilities on Rongcheer Industrial 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 Rongcheer Industrial with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rongcheer Industrial and China Merchants.
Diversification Opportunities for Rongcheer Industrial and China Merchants
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Rongcheer and China is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Rongcheer Industrial Technolog 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 Rongcheer Industrial 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 Rongcheer Industrial Technology 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 Rongcheer Industrial i.e., Rongcheer Industrial and China Merchants go up and down completely randomly.
Pair Corralation between Rongcheer Industrial and China Merchants
Assuming the 90 days trading horizon Rongcheer Industrial Technology is expected to generate 2.1 times more return on investment than China Merchants. However, Rongcheer Industrial is 2.1 times more volatile than China Merchants Bank. It trades about 0.14 of its potential returns per unit of risk. China Merchants Bank is currently generating about 0.15 per unit of risk. If you would invest 4,313 in Rongcheer Industrial Technology on September 16, 2024 and sell it today you would earn a total of 1,692 from holding Rongcheer Industrial Technology or generate 39.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Rongcheer Industrial Technolog vs. China Merchants Bank
Performance |
Timeline |
Rongcheer Industrial |
China Merchants Bank |
Rongcheer Industrial and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Rongcheer Industrial and China Merchants
The main advantage of trading using opposite Rongcheer Industrial and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rongcheer Industrial 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.Rongcheer Industrial vs. Industrial and Commercial | Rongcheer Industrial vs. Kweichow Moutai Co | Rongcheer Industrial vs. Agricultural Bank of | Rongcheer Industrial vs. China Mobile Limited |
China Merchants vs. Postal Savings Bank | China Merchants vs. Rongcheer Industrial Technology | China Merchants vs. China National Software | China Merchants vs. Yunnan Xiyi Industrial |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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