Correlation Between MIRAMAR HOTEL and China Merchants

Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL 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 MIRAMAR HOTEL and China Merchants into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MIRAMAR HOTEL INV and China Merchants Port, you can compare the effects of market volatilities on MIRAMAR HOTEL 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 MIRAMAR HOTEL with a short position of China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and China Merchants.

Diversification Opportunities for MIRAMAR HOTEL and China Merchants

0.54

Correlation Coefficient

MIRAMAR HOTEL  China Merchants

Very weak diversification

The 3 months correlation between MIRAMAR and China is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and China Merchants Port in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Port and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV 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 Port has no effect on the direction of MIRAMAR HOTEL i.e., MIRAMAR HOTEL and China Merchants go up and down completely randomly.

Pair Corralation between MIRAMAR HOTEL and China Merchants

Assuming the 90 days trading horizon MIRAMAR HOTEL is expected to generate 1.9 times less return on investment than China Merchants. But when comparing it to its historical volatility, MIRAMAR HOTEL INV is 1.52 times less risky than China Merchants. It trades about 0.13 of its potential returns per unit of risk. China Merchants Port is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  130.00  in China Merchants Port on April 24, 2025 and sell it today you would earn a total of  29.00  from holding China Merchants Port or generate 22.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MIRAMAR HOTEL INV  vs.  China Merchants Port

MIRAMAR HOTEL INV

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MIRAMAR HOTEL INV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, MIRAMAR HOTEL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

China Merchants Port

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in China Merchants Port are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Merchants reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MIRAMAR HOTEL and China Merchants

The main advantage of trading using opposite MIRAMAR HOTEL and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL 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.

The idea behind MIRAMAR HOTEL INV and China Merchants Port 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.