Correlation Between China Construction and ChengDu Hi
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By analyzing existing cross correlation between China Construction Bank and ChengDu Hi Tech Development, you can compare the effects of market volatilities on China Construction and ChengDu Hi 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 ChengDu Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and ChengDu Hi.
Diversification Opportunities for China Construction and ChengDu Hi
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and ChengDu is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and ChengDu Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChengDu Hi Tech 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 ChengDu Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChengDu Hi Tech has no effect on the direction of China Construction i.e., China Construction and ChengDu Hi go up and down completely randomly.
Pair Corralation between China Construction and ChengDu Hi
Assuming the 90 days trading horizon China Construction is expected to generate 5.53 times less return on investment than ChengDu Hi. But when comparing it to its historical volatility, China Construction Bank is 3.93 times less risky than ChengDu Hi. It trades about 0.08 of its potential returns per unit of risk. ChengDu Hi Tech Development is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,528 in ChengDu Hi Tech Development on August 29, 2024 and sell it today you would earn a total of 4,251 from holding ChengDu Hi Tech Development or generate 278.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. ChengDu Hi Tech Development
Performance |
| Timeline |
| China Construction Bank |
| ChengDu Hi Tech |
China Construction and ChengDu Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and ChengDu Hi
The main advantage of trading using opposite China Construction and ChengDu Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, ChengDu Hi 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 ChengDu Hi will offset losses from the drop in ChengDu Hi's long position.| China Construction vs. Xinjiang Tianrun Dairy | China Construction vs. HaiXin Foods Co | China Construction vs. Juewei Food Co | China Construction vs. Suzhou Douson Drilling |
| ChengDu Hi vs. Changchun Faway Automobile | ChengDu Hi vs. Chongqing Changan Automobile | ChengDu Hi vs. Anhui Jianghuai Automobile | ChengDu Hi vs. Dongfeng Automobile Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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