Correlation Between Shaanxi Construction and China Construction
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By analyzing existing cross correlation between Shaanxi Construction Machinery and China Construction Bank, you can compare the effects of market volatilities on Shaanxi Construction 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 Shaanxi Construction with a short position of China Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Construction and China Construction.
Diversification Opportunities for Shaanxi Construction and China Construction
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shaanxi and China is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Construction Machinery 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 Shaanxi Construction 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 Shaanxi Construction Machinery 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 Shaanxi Construction i.e., Shaanxi Construction and China Construction go up and down completely randomly.
Pair Corralation between Shaanxi Construction and China Construction
Assuming the 90 days trading horizon Shaanxi Construction Machinery is expected to under-perform the China Construction. In addition to that, Shaanxi Construction is 3.73 times more volatile than China Construction Bank. It trades about -0.03 of its total potential returns per unit of risk. China Construction Bank is currently generating about -0.1 per unit of volatility. If you would invest 808.00 in China Construction Bank on September 4, 2024 and sell it today you would lose (14.00) from holding China Construction Bank or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shaanxi Construction Machinery vs. China Construction Bank
Performance |
| Timeline |
| Shaanxi Construction |
| China Construction Bank |
Shaanxi Construction and China Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shaanxi Construction and China Construction
The main advantage of trading using opposite Shaanxi Construction and China Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Construction 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.| Shaanxi Construction vs. Chengdu Kanghua Biological | Shaanxi Construction vs. Beijing Wantai Biological | Shaanxi Construction vs. Suzhou Novoprotein Scientific | Shaanxi Construction vs. Aluminum Corp of |
| China Construction vs. Henan Shuanghui Investment | China Construction vs. Servyou Software Group | China Construction vs. Hunan Investment Group | China Construction vs. Harbin Hatou Investment |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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