Correlation Between China State and China Building
Specify exactly 2 symbols:
By analyzing existing cross correlation between China State Construction and China Building Material, you can compare the effects of market volatilities on China State 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 China State with a short position of China Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of China State and China Building.
Diversification Opportunities for China State and China Building
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China State Construction 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 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 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 China State i.e., China State and China Building go up and down completely randomly.
Pair Corralation between China State and China Building
Assuming the 90 days trading horizon China State Construction is expected to under-perform the China Building. But the stock apears to be less risky and, when comparing its historical volatility, China State Construction is 1.45 times less risky than China Building. The stock trades about -0.04 of its potential returns per unit of risk. The China Building Material is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 686.00 in China Building Material on September 4, 2024 and sell it today you would earn a total of 71.00 from holding China Building Material or generate 10.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China State Construction vs. China Building Material
Performance |
| Timeline |
| China State Construction |
| China Building Material |
China State and China Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China State and China Building
The main advantage of trading using opposite China State and China Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China State 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.| China State vs. Jinhe Biotechnology Co | China State vs. Jiangsu GDK Biotechnology | China State vs. Guangdong Marubi Biotechnology | China State vs. Nanxing Furniture Machinery |
| China Building vs. Zhongrun Resources Investment | China Building vs. Hangzhou Gisway Information | China Building vs. AVCON Information Tech | China Building vs. Chengdu Xingrong 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |