Correlation Between Bank of Suzhou and China Construction
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By analyzing existing cross correlation between Bank of Suzhou and China Construction Bank, you can compare the effects of market volatilities on Bank of Suzhou 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 Bank of Suzhou with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Suzhou and China Construction.
Diversification Opportunities for Bank of Suzhou and China Construction
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and China is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Suzhou 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 Bank of Suzhou 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 Bank of Suzhou 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 Bank of Suzhou i.e., Bank of Suzhou and China Construction go up and down completely randomly.
Pair Corralation between Bank of Suzhou and China Construction
Assuming the 90 days trading horizon Bank of Suzhou is expected to generate 4.78 times less return on investment than China Construction. But when comparing it to its historical volatility, Bank of Suzhou is 1.04 times less risky than China Construction. It trades about 0.06 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 821.00 in China Construction Bank on October 12, 2024 and sell it today you would earn a total of 55.00 from holding China Construction Bank or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of Suzhou vs. China Construction Bank
Performance |
| Timeline |
| Bank of Suzhou |
| China Construction Bank |
Bank of Suzhou and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of Suzhou and China Construction
The main advantage of trading using opposite Bank of Suzhou and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Suzhou 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.| Bank of Suzhou vs. HeNan Splendor Science | Bank of Suzhou vs. Weichai Heavy Machinery | Bank of Suzhou vs. Peoples Insurance of | Bank of Suzhou vs. Huasi Agricultural Development |
| China Construction vs. Bank of Suzhou | China Construction vs. Ping An Insurance | China Construction vs. Ningbo Tech Bank Co | China Construction vs. Xiamen Bank 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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