Correlation Between China Construction and Central China
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By analyzing existing cross correlation between China Construction Bank and Central China Land, you can compare the effects of market volatilities on China Construction and Central 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 Central China. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Central China.
Diversification Opportunities for China Construction and Central China
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Central is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Central China Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central China Land 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 Central China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central China Land has no effect on the direction of China Construction i.e., China Construction and Central China go up and down completely randomly.
Pair Corralation between China Construction and Central China
Assuming the 90 days trading horizon China Construction Bank is expected to generate 1.25 times more return on investment than Central China. However, China Construction is 1.25 times more volatile than Central China Land. It trades about 0.03 of its potential returns per unit of risk. Central China Land is currently generating about -0.07 per unit of risk. If you would invest 854.00 in China Construction Bank on November 27, 2024 and sell it today you would earn a total of 4.00 from holding China Construction Bank or generate 0.47% 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. Central China Land
Performance |
| Timeline |
| China Construction Bank |
| Central China Land |
China Construction and Central China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Central China
The main advantage of trading using opposite China Construction and Central China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Central 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 Central China will offset losses from the drop in Central China's long position.| China Construction vs. Innovative Medical Management | China Construction vs. Changjiang Publishing Media | China Construction vs. Duzhe Publishing Media | China Construction vs. Huaxia Fund Management |
| Central China vs. Ming Yang Smart | Central China vs. 159681 | Central China vs. 159005 | Central China vs. Loctek Ergonomic Technology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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