Correlation Between Harbin Air and China Construction
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By analyzing existing cross correlation between Harbin Air Conditioning and China Construction Bank, you can compare the effects of market volatilities on Harbin Air 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 Harbin Air with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbin Air and China Construction.
Diversification Opportunities for Harbin Air and China Construction
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Harbin and China is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Harbin Air Conditioning 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 Harbin Air 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 Harbin Air Conditioning 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 Harbin Air i.e., Harbin Air and China Construction go up and down completely randomly.
Pair Corralation between Harbin Air and China Construction
Assuming the 90 days trading horizon Harbin Air Conditioning is expected to under-perform the China Construction. In addition to that, Harbin Air is 2.91 times more volatile than China Construction Bank. It trades about -0.17 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.41 per unit of volatility. If you would invest 806.00 in China Construction Bank on September 28, 2024 and sell it today you would earn a total of 77.00 from holding China Construction Bank or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbin Air Conditioning vs. China Construction Bank
Performance |
| Timeline |
| Harbin Air Conditioning |
| China Construction Bank |
Harbin Air and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbin Air and China Construction
The main advantage of trading using opposite Harbin Air and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbin Air 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.| Harbin Air vs. Western Metal Materials | Harbin Air vs. Hangzhou Gaoxin Rubber | Harbin Air vs. Sanxiang Advanced Materials | Harbin Air vs. Sinosteel Luonai Materials |
| China Construction vs. Harbin Air Conditioning | China Construction vs. Beijing Wandong Medical | China Construction vs. Inspur Software Co | China Construction vs. Ningbo MedicalSystem Biotechnology |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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