China Construction Correlations

00939 Stock

14.29 0.10 0.69%

The current 90-days correlation between China Construction Bank and Taiwan Semiconductor Manufacturing is 0.52 (i.e., Very weak diversification). The correlation of China Construction is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak. If the correlation is 0, the equities are not correlated; they are entirely random.

China Construction Correlation With Market

Modest diversification

The correlation between China Construction Bank and DJI is 0.2 (i.e., Modest diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and DJI in the same portfolio, assuming nothing else is changed.

The ability to find closely correlated positions to China Construction could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace China Construction when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back China Construction - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling China Construction Bank to buy it.

Moving together with China Stock

0.65	1303	Nan Ya Plastics	Pair Corr
0.64	1301	Formosa Plastics Corp	Pair Corr
0.73	0051	YuantaP shares Taiwan	Pair Corr

Moving against China Stock

0.37

8047

Great Computer

Pair Corr

Related Correlations Analysis

	2330	2317	2454	2412	6505	2308	2882	2303	1303	1301
2330		0.93	0.79	-0.42	-0.49	0.59	0.92	-0.67	-0.11	-0.21	2330
2317	0.93		0.88	-0.61	-0.55	0.55	0.88	-0.79	-0.2	-0.31	2317
2454	0.79	0.88		-0.59	-0.32	0.57	0.76	-0.62	0.01	-0.09	2454
2412	-0.42	-0.61	-0.59		0.4	-0.11	-0.33	0.58	0.46	0.5	2412
6505	-0.49	-0.55	-0.32	0.4		-0.01	-0.42	0.83	0.79	0.85	6505
2308	0.59	0.55	0.57	-0.11	-0.01		0.49	-0.23	0.2	0.09	2308
2882	0.92	0.88	0.76	-0.33	-0.42	0.49		-0.61	-0.02	-0.08	2882
2303	-0.67	-0.79	-0.62	0.58	0.83	-0.23	-0.61		0.5	0.63	2303
1303	-0.11	-0.2	0.01	0.46	0.79	0.2	-0.02	0.5		0.96	1303
1301	-0.21	-0.31	-0.09	0.5	0.85	0.09	-0.08	0.63	0.96		1301
	2330	2317	2454	2412	6505	2308	2882	2303	1303	1301

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Correlation Matchups

Over a given time period, the two securities move together when the Correlation Coefficient is positive. Conversely, the two assets move in opposite directions when the Correlation Coefficient is negative. Determining your positions' relationship to each other is valuable for analyzing and projecting your portfolio's future expected return and risk.

High positive correlations

1301	+ 0.96	1303
2317	+ 0.93	2330
2882	+ 0.92	2330
2454	+ 0.88	2317
2882	+ 0.88	2317
1301	+ 0.85	6505

High negative correlations

2303	- 0.79	2317
2303	- 0.67	2330
2303	- 0.62	2454
2303	- 0.61	2882
2412	- 0.61	2317
2412	- 0.59	2454

Risk-Adjusted Indicators

There is a big difference between China Stock performing well and China Construction Company doing well as a business compared to the competition. There are so many exceptions to the norm that investors cannot definitively determine what's good or bad unless they analyze China Construction's multiple risk-adjusted performance indicators across the competitive landscape. These indicators are quantitative in nature and help investors forecast volatility and risk-adjusted expected returns across various positions.

	Mean Deviation	Jensen Alpha	Sortino Ratio	Treynor Ratio	Semi Deviation	Expected Shortfall	Potential Upside	Value @Risk	Maximum Drawdown
2330	1.32	0.05	(0.01)	0.24	1.60	(1.52)	2.87	(2.34)	9.09
2317	1.51	0.22	0.03	(0.75)	1.74	(1.66)	3.69	(2.73)	8.59
2454	1.85	0.08	(0.02)	(2.34)	2.15	(2.35)	4.05	(2.62)	11.13
2412	0.39	(0.02)	(0.16)	(0.12)	0.53	(0.56)	0.82	(1.19)	2.43
6505	1.45	(0.38)	0.00	3.15	0.00	0.00	2.89	(3.51)	9.39
2308	1.39	(0.10)	0.00	(0.11)	0.00	0.00	2.84	(3.46)	11.60
2882	0.99	0.13	0.01	2.47	1.12	(1.08)	1.89	(1.57)	7.20
2303	0.94	(0.34)	0.00	(1.08)	0.00	0.00	1.65	(2.18)	5.49
1303	1.35	(0.23)	0.00	(0.64)	0.00	0.00	2.85	(2.84)	10.09
1301	1.48	(0.27)	0.00	(1.06)	0.00	0.00	4.33	(3.23)	10.13

China Construction Related Equities

One of the popular trading techniques among algorithmic traders is to use market-neutral strategies where every trade hedges away some risk. Because there are two separate transactions required, even if one position performs unexpectedly, the other equity can make up some of the losses. Below are some of the equities that can be combined with China Construction stock to make a market-neutral strategy. Peer analysis of China Construction could also be used in its relative valuation, which is a method of valuing China Construction by comparing valuation metrics with similar companies.

Taiwan Semiconductor Manufacturing Hon Hai Precision MediaTek Chunghwa Telecom Co Formosa Petrochemical Corp Delta Electronics Cathay Financial Holding United Microelectronics Nan Ya Plastics Formosa Plastics Corp American Airlines Group Alcoa Corp Apple Inc Best Buy Co Citigroup

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