Correlation Between China Construction and Shenwu Energy
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By analyzing existing cross correlation between China Construction Bank and Shenwu Energy Saving, you can compare the effects of market volatilities on China Construction and Shenwu Energy 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 Shenwu Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Shenwu Energy.
Diversification Opportunities for China Construction and Shenwu Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Shenwu is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Shenwu Energy Saving in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenwu Energy Saving 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 Shenwu Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenwu Energy Saving has no effect on the direction of China Construction i.e., China Construction and Shenwu Energy go up and down completely randomly.
Pair Corralation between China Construction and Shenwu Energy
Assuming the 90 days trading horizon China Construction is expected to generate 2.14 times less return on investment than Shenwu Energy. But when comparing it to its historical volatility, China Construction Bank is 2.67 times less risky than Shenwu Energy. It trades about 0.06 of its potential returns per unit of risk. Shenwu Energy Saving is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 307.00 in Shenwu Energy Saving on September 3, 2024 and sell it today you would earn a total of 61.00 from holding Shenwu Energy Saving or generate 19.87% 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. Shenwu Energy Saving
Performance |
| Timeline |
| China Construction Bank |
| Shenwu Energy Saving |
China Construction and Shenwu Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Shenwu Energy
The main advantage of trading using opposite China Construction and Shenwu Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Shenwu Energy 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 Shenwu Energy will offset losses from the drop in Shenwu Energy's long position.| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
| Shenwu Energy vs. Shanghai Action Education | Shenwu Energy vs. Offcn Education Technology | Shenwu Energy vs. Hubeiyichang Transportation Group | Shenwu Energy vs. Shanghai Broadband 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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