Correlation Between MOVIE GAMES and China Construction
Can any of the company-specific risk be diversified away by investing in both MOVIE GAMES and China Construction at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MOVIE GAMES and China Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOVIE GAMES SA and China Construction Bank, you can compare the effects of market volatilities on MOVIE GAMES 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 MOVIE GAMES with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOVIE GAMES and China Construction.
Diversification Opportunities for MOVIE GAMES and China Construction
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MOVIE and China is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding MOVIE GAMES SA 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 MOVIE GAMES 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 MOVIE GAMES SA 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 MOVIE GAMES i.e., MOVIE GAMES and China Construction go up and down completely randomly.
Pair Corralation between MOVIE GAMES and China Construction
Assuming the 90 days horizon MOVIE GAMES SA is expected to under-perform the China Construction. But the stock apears to be less risky and, when comparing its historical volatility, MOVIE GAMES SA is 1.47 times less risky than China Construction. The stock trades about -0.29 of its potential returns per unit of risk. The China Construction Bank is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 62.00 in China Construction Bank on September 4, 2024 and sell it today you would earn a total of 12.00 from holding China Construction Bank or generate 19.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
MOVIE GAMES SA vs. China Construction Bank
Performance |
| Timeline |
| MOVIE GAMES SA |
| China Construction Bank |
MOVIE GAMES and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOVIE GAMES and China Construction
The main advantage of trading using opposite MOVIE GAMES and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOVIE GAMES 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.| MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc | MOVIE GAMES vs. Apple Inc |
| China Construction vs. MOVIE GAMES SA | China Construction vs. ALERION CLEANPOWER | China Construction vs. GEAR4MUSIC LS 10 | China Construction vs. HANOVER INSURANCE |
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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