Correlation Between Ideanomics and China Merchants

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Ideanomics and China Merchants at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ideanomics and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ideanomics and China Merchants Bank, you can compare the effects of market volatilities on Ideanomics 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 Ideanomics with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ideanomics and China Merchants.

Diversification Opportunities for Ideanomics and China Merchants

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Ideanomics and China is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ideanomics 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 Ideanomics 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 Ideanomics 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 Ideanomics i.e., Ideanomics and China Merchants go up and down completely randomly.

Pair Corralation between Ideanomics and China Merchants

Given the investment horizon of 90 days Ideanomics is expected to under-perform the China Merchants. In addition to that, Ideanomics is 2.81 times more volatile than China Merchants Bank. It trades about -0.01 of its total potential returns per unit of risk. China Merchants Bank is currently generating about 0.01 per unit of volatility. If you would invest  2,427  in China Merchants Bank on July 5, 2022 and sell it today you would lose (113.00)  from holding China Merchants Bank or give up 4.66% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ideanomics  vs.  China Merchants Bank

 Performance (%) 
       Timeline  
Ideanomics 
Ideanomics Performance
0 of 100
Over the last 90 days Ideanomics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Ideanomics Price Channel

China Merchants Bank 
China Performance
0 of 100
Over the last 90 days China Merchants Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

China Price Channel

Ideanomics and China Merchants Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ideanomics and China Merchants

The main advantage of trading using opposite Ideanomics and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ideanomics 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.
Ideanomics vs. Amazon Inc
The idea behind Ideanomics and China Merchants Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
China Merchants vs. Amazon Inc
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

Other Complementary Tools

Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go