Correlation Between China Construction and Huagong Tech
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By analyzing existing cross correlation between China Construction Bank and Huagong Tech Co, you can compare the effects of market volatilities on China Construction and Huagong Tech 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 Huagong Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Huagong Tech.
Diversification Opportunities for China Construction and Huagong Tech
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Huagong is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Huagong Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huagong 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 Huagong Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huagong Tech has no effect on the direction of China Construction i.e., China Construction and Huagong Tech go up and down completely randomly.
Pair Corralation between China Construction and Huagong Tech
Assuming the 90 days trading horizon China Construction is expected to generate 1.21 times less return on investment than Huagong Tech. But when comparing it to its historical volatility, China Construction Bank is 2.07 times less risky than Huagong Tech. It trades about 0.49 of its potential returns per unit of risk. Huagong Tech Co is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 3,510 in Huagong Tech Co on September 27, 2024 and sell it today you would earn a total of 493.00 from holding Huagong Tech Co or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Construction Bank vs. Huagong Tech Co
Performance |
| Timeline |
| China Construction Bank |
| Huagong Tech |
China Construction and Huagong Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Huagong Tech
The main advantage of trading using opposite China Construction and Huagong Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Huagong Tech 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 Huagong Tech will offset losses from the drop in Huagong Tech's long position.| China Construction vs. Industrial and Commercial | China Construction vs. Kweichow Moutai Co | China Construction vs. Agricultural Bank of | China Construction vs. China Mobile Limited |
| Huagong Tech vs. Industrial and Commercial | Huagong Tech vs. China Construction Bank | Huagong Tech vs. Agricultural Bank of | Huagong Tech vs. Bank of China |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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