Correlation Between Dr Peng and China Building
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By analyzing existing cross correlation between Dr Peng Telecom and China Building Material, you can compare the effects of market volatilities on Dr Peng and China Building 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 Dr Peng with a short position of China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dr Peng and China Building.
Diversification Opportunities for Dr Peng and China Building
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 600804 and China is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dr Peng Telecom and China Building Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Building Material and Dr Peng 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 Dr Peng Telecom are associated (or correlated) with China Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Building Material has no effect on the direction of Dr Peng i.e., Dr Peng and China Building go up and down completely randomly.
Pair Corralation between Dr Peng and China Building
Assuming the 90 days trading horizon Dr Peng Telecom is expected to under-perform the China Building. In addition to that, Dr Peng is 1.37 times more volatile than China Building Material. It trades about -0.04 of its total potential returns per unit of risk. China Building Material is currently generating about 0.02 per unit of volatility. If you would invest 685.00 in China Building Material on October 29, 2024 and sell it today you would earn a total of 16.00 from holding China Building Material or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dr Peng Telecom vs. China Building Material
Performance |
| Timeline |
| Dr Peng Telecom |
| China Building Material |
Dr Peng and China Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dr Peng and China Building
The main advantage of trading using opposite Dr Peng and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dr Peng position performs unexpectedly, China Building 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 Building will offset losses from the drop in China Building's long position.| Dr Peng vs. Anhui Transport Consulting | Dr Peng vs. New Hope Dairy | Dr Peng vs. Shuhua Sports Co | Dr Peng vs. Hubeiyichang Transportation Group |
| China Building vs. Tianjin Hi Tech Development | China Building vs. Bank of Communications | China Building vs. Sichuan Jinshi Technology | China Building vs. China Satellite Communications |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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