Correlation Between China State and China Vanke
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By analyzing existing cross correlation between China State Construction and China Vanke Co, you can compare the effects of market volatilities on China State and China Vanke 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 China State with a short position of China Vanke. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Vanke.
Diversification Opportunities for China State and China Vanke
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and China is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction and China Vanke Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Vanke and China State 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 China State Construction are associated (or correlated) with China Vanke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Vanke has no effect on the direction of China State i.e., China State and China Vanke go up and down completely randomly.
Pair Corralation between China State and China Vanke
Assuming the 90 days trading horizon China State Construction is expected to generate 0.99 times more return on investment than China Vanke. However, China State Construction is 1.01 times less risky than China Vanke. It trades about -0.17 of its potential returns per unit of risk. China Vanke Co is currently generating about -0.2 per unit of risk. If you would invest 648.00 in China State Construction on August 24, 2024 and sell it today you would lose (53.00) from holding China State Construction or give up 8.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. China Vanke Co
Performance |
| Timeline |
| China State Construction |
| China Vanke |
China State and China Vanke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and China Vanke
The main advantage of trading using opposite China State and China Vanke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State position performs unexpectedly, China Vanke 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 Vanke will offset losses from the drop in China Vanke's long position.| China State vs. Chengdu Kanghua Biological | China State vs. Beijing Wantai Biological | China State vs. Suzhou Novoprotein Scientific | China State vs. Aluminum Corp of |
| China Vanke vs. Guangzhou Tinci Materials | China Vanke vs. Guangdong Marubi Biotechnology | China Vanke vs. Cangzhou Mingzhu Plastic | China Vanke vs. Eastern Air Logistics |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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