Correlation Between Datang HuaYin and China Construction
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By analyzing existing cross correlation between Datang HuaYin Electric and China Construction Bank, you can compare the effects of market volatilities on Datang HuaYin 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 Datang HuaYin with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang HuaYin and China Construction.
Diversification Opportunities for Datang HuaYin and China Construction
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Datang and China is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Datang HuaYin Electric 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 Datang HuaYin 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 Datang HuaYin Electric 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 Datang HuaYin i.e., Datang HuaYin and China Construction go up and down completely randomly.
Pair Corralation between Datang HuaYin and China Construction
Assuming the 90 days trading horizon Datang HuaYin Electric is expected to under-perform the China Construction. In addition to that, Datang HuaYin is 2.25 times more volatile than China Construction Bank. It trades about -0.05 of its total potential returns per unit of risk. China Construction Bank is currently generating about 0.04 per unit of volatility. If you would invest 793.00 in China Construction Bank on September 1, 2024 and sell it today you would earn a total of 5.00 from holding China Construction Bank or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang HuaYin Electric vs. China Construction Bank
Performance |
| Timeline |
| Datang HuaYin Electric |
| China Construction Bank |
Datang HuaYin and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang HuaYin and China Construction
The main advantage of trading using opposite Datang HuaYin and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang HuaYin 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.| Datang HuaYin vs. Chengdu Kanghua Biological | Datang HuaYin vs. Beijing Wantai Biological | Datang HuaYin vs. Suzhou Novoprotein Scientific | Datang HuaYin vs. Aluminum Corp of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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