Correlation Between Tieling Newcity and China Construction
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By analyzing existing cross correlation between Tieling Newcity Investment and China Construction Bank, you can compare the effects of market volatilities on Tieling Newcity and China Construction 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 Tieling Newcity with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tieling Newcity and China Construction.
Diversification Opportunities for Tieling Newcity and China Construction
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tieling and China is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tieling Newcity Investment and China Construction Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Construction Bank and Tieling Newcity 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 Tieling Newcity Investment are associated (or correlated) with China Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Construction Bank has no effect on the direction of Tieling Newcity i.e., Tieling Newcity and China Construction go up and down completely randomly.
Pair Corralation between Tieling Newcity and China Construction
Assuming the 90 days trading horizon Tieling Newcity Investment is expected to generate 2.96 times more return on investment than China Construction. However, Tieling Newcity is 2.96 times more volatile than China Construction Bank. It trades about 0.22 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.04 per unit of risk. If you would invest 238.00 in Tieling Newcity Investment on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Tieling Newcity Investment or generate 12.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tieling Newcity Investment vs. China Construction Bank
Performance |
| Timeline |
| Tieling Newcity Inve |
| China Construction Bank |
Tieling Newcity and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tieling Newcity and China Construction
The main advantage of trading using opposite Tieling Newcity and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tieling Newcity position performs unexpectedly, China Construction 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 Construction will offset losses from the drop in China Construction's long position.| Tieling Newcity vs. PetroChina Co Ltd | Tieling Newcity vs. China Mobile Limited | Tieling Newcity vs. CNOOC Limited | Tieling Newcity vs. Ping An Insurance |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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