Correlation Between China Securities and China Building
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By analyzing existing cross correlation between China Securities 800 and China Building Material, you can compare the effects of market volatilities on China Securities and China Building 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 China Securities with a short position of China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Securities and China Building.
Diversification Opportunities for China Securities and China Building
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and China is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Securities 800 and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material and China Securities 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 China Securities 800 are associated (or correlated) with China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of China Securities i.e., China Securities and China Building go up and down completely randomly.
Pair Corralation between China Securities and China Building
Assuming the 90 days trading horizon China Securities 800 is expected to generate 0.5 times more return on investment than China Building. However, China Securities 800 is 2.01 times less risky than China Building. It trades about 0.02 of its potential returns per unit of risk. China Building Material is currently generating about -0.02 per unit of risk. If you would invest 405,932 in China Securities 800 on September 12, 2024 and sell it today you would earn a total of 26,566 from holding China Securities 800 or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Securities 800 vs. China Building Material
Performance |
| Timeline |
China Securities and China Building Volatility Contrast
Predicted Return Density |
| Returns |
China Securities 800
Pair trading matchups for China Securities
China Building Material
Pair trading matchups for China Building
Pair Trading with China Securities and China Building
The main advantage of trading using opposite China Securities and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Securities position performs unexpectedly, China Building 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 Building will offset losses from the drop in China Building's long position.| China Securities vs. Ningxia Building Materials | China Securities vs. Western Metal Materials | China Securities vs. Ningbo Bohui Chemical | China Securities vs. Hengerda New Materials |
| China Building vs. Qumei Furniture Group | China Building vs. AUPU Home Style | China Building vs. Easyhome New Retail | China Building vs. Markor International Home |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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