Correlation Between Shandong Longquan and China Construction
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By analyzing existing cross correlation between Shandong Longquan Pipeline and China Construction Bank, you can compare the effects of market volatilities on Shandong Longquan 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 Shandong Longquan with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Longquan and China Construction.
Diversification Opportunities for Shandong Longquan and China Construction
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shandong and China is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Longquan Pipeline 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 Shandong Longquan 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 Shandong Longquan Pipeline 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 Shandong Longquan i.e., Shandong Longquan and China Construction go up and down completely randomly.
Pair Corralation between Shandong Longquan and China Construction
Assuming the 90 days trading horizon Shandong Longquan Pipeline is expected to generate 2.71 times more return on investment than China Construction. However, Shandong Longquan is 2.71 times more volatile than China Construction Bank. It trades about 0.04 of its potential returns per unit of risk. China Construction Bank is currently generating about -0.07 per unit of risk. If you would invest 469.00 in Shandong Longquan Pipeline on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Shandong Longquan Pipeline or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shandong Longquan Pipeline vs. China Construction Bank
Performance |
| Timeline |
| Shandong Longquan |
| China Construction Bank |
Shandong Longquan and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shandong Longquan and China Construction
The main advantage of trading using opposite Shandong Longquan and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Longquan 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.| Shandong Longquan vs. Hunan Investment Group | Shandong Longquan vs. Xiandai Investment Co | Shandong Longquan vs. Ningbo Ligong Online | Shandong Longquan vs. Bank of Suzhou |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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