Correlation Between China Construction and Xiangyang Automobile
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By analyzing existing cross correlation between China Construction Bank and Xiangyang Automobile Bearing, you can compare the effects of market volatilities on China Construction and Xiangyang Automobile 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 Xiangyang Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Xiangyang Automobile.
Diversification Opportunities for China Construction and Xiangyang Automobile
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Xiangyang is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Xiangyang Automobile Bearing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiangyang Automobile 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 Xiangyang Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiangyang Automobile has no effect on the direction of China Construction i.e., China Construction and Xiangyang Automobile go up and down completely randomly.
Pair Corralation between China Construction and Xiangyang Automobile
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.23 times more return on investment than Xiangyang Automobile. However, China Construction Bank is 4.38 times less risky than Xiangyang Automobile. It trades about -0.02 of its potential returns per unit of risk. Xiangyang Automobile Bearing is currently generating about -0.01 per unit of risk. If you would invest 801.00 in China Construction Bank on August 29, 2024 and sell it today you would lose (3.00) from holding China Construction Bank or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Xiangyang Automobile Bearing
Performance |
| Timeline |
| China Construction Bank |
| Xiangyang Automobile |
China Construction and Xiangyang Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Xiangyang Automobile
The main advantage of trading using opposite China Construction and Xiangyang Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Xiangyang Automobile 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 Xiangyang Automobile will offset losses from the drop in Xiangyang Automobile'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 |
| Xiangyang Automobile vs. Agricultural Bank of | Xiangyang Automobile vs. Industrial and Commercial | Xiangyang Automobile vs. Bank of China | Xiangyang Automobile vs. China Construction Bank |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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