Correlation Between China Construction and Digital China
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By analyzing existing cross correlation between China Construction Bank and Digital China Information, you can compare the effects of market volatilities on China Construction and Digital China 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 Digital China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Digital China.
Diversification Opportunities for China Construction and Digital China
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Digital is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Digital China Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital China Information 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 Digital China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital China Information has no effect on the direction of China Construction i.e., China Construction and Digital China go up and down completely randomly.
Pair Corralation between China Construction and Digital China
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.36 times more return on investment than Digital China. However, China Construction Bank is 2.79 times less risky than Digital China. It trades about 0.13 of its potential returns per unit of risk. Digital China Information is currently generating about -0.05 per unit of risk. If you would invest 798.00 in China Construction Bank on October 30, 2024 and sell it today you would earn a total of 56.00 from holding China Construction Bank or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Digital China Information
Performance |
| Timeline |
| China Construction Bank |
| Digital China Information |
China Construction and Digital China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Digital China
The main advantage of trading using opposite China Construction and Digital China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Digital China 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 Digital China will offset losses from the drop in Digital China's long position.| China Construction vs. Beingmate Baby Child | China Construction vs. Runjian Communication Co | China Construction vs. Fiberhome Telecommunication Technologies | China Construction vs. AUPU Home Style |
| Digital China vs. Nanjing Putian Telecommunications | Digital China vs. Guangdong Qunxing Toys | Digital China vs. Quectel Wireless Solutions | Digital China vs. Elite Color Environmental |
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 CEOs Directory module to screen CEOs from public companies around the world.
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