Correlation Between Jiangsu Changfa and China Construction
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By analyzing existing cross correlation between Jiangsu Changfa Refrigeration and China Construction Bank, you can compare the effects of market volatilities on Jiangsu Changfa 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 Jiangsu Changfa with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Changfa and China Construction.
Diversification Opportunities for Jiangsu Changfa and China Construction
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Changfa Refrigeration 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 Jiangsu Changfa 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 Jiangsu Changfa Refrigeration 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 Jiangsu Changfa i.e., Jiangsu Changfa and China Construction go up and down completely randomly.
Pair Corralation between Jiangsu Changfa and China Construction
Assuming the 90 days trading horizon Jiangsu Changfa Refrigeration is expected to under-perform the China Construction. In addition to that, Jiangsu Changfa is 3.34 times more volatile than China Construction Bank. It trades about -0.08 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.34 per unit of volatility. If you would invest 790.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 47.00 from holding China Construction Bank or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jiangsu Changfa Refrigeration vs. China Construction Bank
Performance |
| Timeline |
| Jiangsu Changfa Refr |
| China Construction Bank |
Jiangsu Changfa and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Changfa and China Construction
The main advantage of trading using opposite Jiangsu Changfa and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Changfa 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.| Jiangsu Changfa vs. Agricultural Bank of | Jiangsu Changfa vs. Industrial and Commercial | Jiangsu Changfa vs. Bank of China | Jiangsu Changfa vs. PetroChina Co Ltd |
| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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