Correlation Between China World and Tengda Construction
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By analyzing existing cross correlation between China World Trade and Tengda Construction Group, you can compare the effects of market volatilities on China World and Tengda 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 China World with a short position of Tengda Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Tengda Construction.
Diversification Opportunities for China World and Tengda Construction
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Tengda is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade and Tengda Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tengda Construction and China World 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 China World Trade are associated (or correlated) with Tengda Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tengda Construction has no effect on the direction of China World i.e., China World and Tengda Construction go up and down completely randomly.
Pair Corralation between China World and Tengda Construction
Assuming the 90 days trading horizon China World Trade is expected to generate 0.64 times more return on investment than Tengda Construction. However, China World Trade is 1.56 times less risky than Tengda Construction. It trades about -0.19 of its potential returns per unit of risk. Tengda Construction Group is currently generating about -0.59 per unit of risk. If you would invest 2,431 in China World Trade on October 15, 2024 and sell it today you would lose (107.00) from holding China World Trade or give up 4.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China World Trade vs. Tengda Construction Group
Performance |
| Timeline |
| China World Trade |
| Tengda Construction |
China World and Tengda Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China World and Tengda Construction
The main advantage of trading using opposite China World and Tengda Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World position performs unexpectedly, Tengda 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 Tengda Construction will offset losses from the drop in Tengda Construction's long position.| China World vs. Qilu Bank Co | China World vs. Financial Street Holdings | China World vs. Harvest Fund Management | China World vs. Huaxia Fund Management |
| Tengda Construction vs. Kuang Chi Technologies | Tengda Construction vs. Unisplendour Corp | Tengda Construction vs. GreenTech Environmental Co | Tengda Construction vs. Nanjing Putian Telecommunications |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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