Correlation Between Panda Dairy and China Construction
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By analyzing existing cross correlation between Panda Dairy Corp and China Construction Bank, you can compare the effects of market volatilities on Panda Dairy 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 Panda Dairy with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panda Dairy and China Construction.
Diversification Opportunities for Panda Dairy and China Construction
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Panda and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Panda Dairy Corp 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 Panda Dairy 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 Panda Dairy Corp 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 Panda Dairy i.e., Panda Dairy and China Construction go up and down completely randomly.
Pair Corralation between Panda Dairy and China Construction
Assuming the 90 days trading horizon Panda Dairy Corp is expected to generate 3.39 times more return on investment than China Construction. However, Panda Dairy is 3.39 times more volatile than China Construction Bank. It trades about 0.01 of its potential returns per unit of risk. China Construction Bank is currently generating about -0.21 per unit of risk. If you would invest 2,097 in Panda Dairy Corp on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Panda Dairy Corp or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panda Dairy Corp vs. China Construction Bank
Performance |
| Timeline |
| Panda Dairy Corp |
| China Construction Bank |
Panda Dairy and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panda Dairy and China Construction
The main advantage of trading using opposite Panda Dairy and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panda Dairy 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.| Panda Dairy vs. China Petroleum Chemical | Panda Dairy vs. PetroChina Co Ltd | Panda Dairy vs. China State Construction | Panda Dairy vs. China Railway Group |
| China Construction vs. Zhengzhou Qianweiyangchu Food | China Construction vs. Panda Dairy Corp | China Construction vs. Youyou Foods Co | China Construction vs. Zhongyin Babi Food |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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