Correlation Between China Construction and Zhongrun Resources
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By analyzing existing cross correlation between China Construction Bank and Zhongrun Resources Investment, you can compare the effects of market volatilities on China Construction and Zhongrun Resources 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 Construction with a short position of Zhongrun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Zhongrun Resources.
Diversification Opportunities for China Construction and Zhongrun Resources
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Zhongrun is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Zhongrun Resources Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhongrun Resources and China 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 China Construction Bank are associated (or correlated) with Zhongrun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhongrun Resources has no effect on the direction of China Construction i.e., China Construction and Zhongrun Resources go up and down completely randomly.
Pair Corralation between China Construction and Zhongrun Resources
Assuming the 90 days trading horizon China Construction is expected to generate 46.7 times less return on investment than Zhongrun Resources. But when comparing it to its historical volatility, China Construction Bank is 5.31 times less risky than Zhongrun Resources. It trades about 0.04 of its potential returns per unit of risk. Zhongrun Resources Investment is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 248.00 in Zhongrun Resources Investment on August 30, 2024 and sell it today you would earn a total of 88.00 from holding Zhongrun Resources Investment or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Zhongrun Resources Investment
Performance |
| Timeline |
| China Construction Bank |
| Zhongrun Resources |
China Construction and Zhongrun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Zhongrun Resources
The main advantage of trading using opposite China Construction and Zhongrun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Zhongrun Resources 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 Zhongrun Resources will offset losses from the drop in Zhongrun Resources' long position.| China Construction vs. Kweichow Moutai Co | China Construction vs. Shenzhen Mindray Bio Medical | China Construction vs. Jiangsu Pacific Quartz | China Construction vs. G bits Network Technology |
| Zhongrun Resources vs. Industrial and Commercial | Zhongrun Resources vs. Agricultural Bank of | Zhongrun Resources vs. China Construction Bank | Zhongrun Resources vs. Bank of China |
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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