Correlation Between Shenwu Energy and China Construction
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By analyzing existing cross correlation between Shenwu Energy Saving and China Construction Bank, you can compare the effects of market volatilities on Shenwu Energy 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 Shenwu Energy with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenwu Energy and China Construction.
Diversification Opportunities for Shenwu Energy and China Construction
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shenwu and China is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shenwu Energy Saving 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 Shenwu Energy 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 Shenwu Energy Saving 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 Shenwu Energy i.e., Shenwu Energy and China Construction go up and down completely randomly.
Pair Corralation between Shenwu Energy and China Construction
Assuming the 90 days trading horizon Shenwu Energy Saving is expected to generate 2.67 times more return on investment than China Construction. However, Shenwu Energy is 2.67 times more volatile than China Construction Bank. It trades about 0.05 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.06 per unit of risk. If you would invest 307.00 in Shenwu Energy Saving on September 3, 2024 and sell it today you would earn a total of 61.00 from holding Shenwu Energy Saving or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenwu Energy Saving vs. China Construction Bank
Performance |
| Timeline |
| Shenwu Energy Saving |
| China Construction Bank |
Shenwu Energy and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenwu Energy and China Construction
The main advantage of trading using opposite Shenwu Energy and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenwu Energy 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.| Shenwu Energy vs. Shanghai Action Education | Shenwu Energy vs. Offcn Education Technology | Shenwu Energy vs. Hubeiyichang Transportation Group | Shenwu Energy vs. Shanghai Broadband Technology |
| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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