Correlation Between Shenzhen and China Construction
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By analyzing existing cross correlation between Shenzhen AV Display Co and China Construction Bank, you can compare the effects of market volatilities on Shenzhen 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 Shenzhen with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen and China Construction.
Diversification Opportunities for Shenzhen and China Construction
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shenzhen and China is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen AV Display Co 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 Shenzhen 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 Shenzhen AV Display Co 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 Shenzhen i.e., Shenzhen and China Construction go up and down completely randomly.
Pair Corralation between Shenzhen and China Construction
Assuming the 90 days trading horizon Shenzhen AV Display Co is expected to generate 1.56 times more return on investment than China Construction. However, Shenzhen is 1.56 times more volatile than China Construction Bank. It trades about 0.19 of its potential returns per unit of risk. China Construction Bank is currently generating about 0.13 per unit of risk. If you would invest 2,914 in Shenzhen AV Display Co on November 6, 2024 and sell it today you would earn a total of 206.00 from holding Shenzhen AV Display Co or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shenzhen AV Display Co vs. China Construction Bank
Performance |
| Timeline |
| Shenzhen AV Display |
| China Construction Bank |
Shenzhen and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenzhen and China Construction
The main advantage of trading using opposite Shenzhen and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen 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.| Shenzhen vs. Pengxin International Mining | Shenzhen vs. Xiangyang Automobile Bearing | Shenzhen vs. Eastern Communications Co | Shenzhen vs. Guangdong Jingyi Metal |
| China Construction vs. Nantong JiangTian Chemical | China Construction vs. Soyea Technology Co | China Construction vs. Hubei Forbon Technology | China Construction vs. Xilong Chemical 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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