Correlation Between Changchun Faway and China Construction
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By analyzing existing cross correlation between Changchun Faway Automobile and China Construction Bank, you can compare the effects of market volatilities on Changchun Faway 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 Changchun Faway with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and China Construction.
Diversification Opportunities for Changchun Faway and China Construction
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile 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 Changchun Faway 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 Changchun Faway Automobile 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 Changchun Faway i.e., Changchun Faway and China Construction go up and down completely randomly.
Pair Corralation between Changchun Faway and China Construction
Assuming the 90 days trading horizon Changchun Faway is expected to generate 90.92 times less return on investment than China Construction. In addition to that, Changchun Faway is 1.87 times more volatile than China Construction Bank. It trades about 0.0 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.08 per unit of volatility. If you would invest 639.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 191.00 from holding China Construction Bank or generate 29.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.62% |
| Values | Daily Returns |
Changchun Faway Automobile vs. China Construction Bank
Performance |
| Timeline |
| Changchun Faway Auto |
| China Construction Bank |
Changchun Faway and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changchun Faway and China Construction
The main advantage of trading using opposite Changchun Faway and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway 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.| Changchun Faway vs. BeiGene | Changchun Faway vs. Kweichow Moutai Co | Changchun Faway vs. Beijing Roborock Technology | Changchun Faway vs. G bits Network Technology |
| China Construction vs. Tongyu Communication | China Construction vs. Zhongtong Guomai Communication | China Construction vs. Changchun Faway Automobile | China Construction vs. Allwin Telecommunication 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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