Correlation Between China Construction and Inner Mongolia
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By analyzing existing cross correlation between China Construction Bank and Inner Mongolia Dazhong, you can compare the effects of market volatilities on China Construction and Inner Mongolia 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 Inner Mongolia. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Inner Mongolia.
Diversification Opportunities for China Construction and Inner Mongolia
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Inner is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Inner Mongolia Dazhong in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inner Mongolia Dazhong 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 Inner Mongolia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inner Mongolia Dazhong has no effect on the direction of China Construction i.e., China Construction and Inner Mongolia go up and down completely randomly.
Pair Corralation between China Construction and Inner Mongolia
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.65 times more return on investment than Inner Mongolia. However, China Construction Bank is 1.54 times less risky than Inner Mongolia. It trades about 0.09 of its potential returns per unit of risk. Inner Mongolia Dazhong is currently generating about -0.02 per unit of risk. If you would invest 516.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 315.00 from holding China Construction Bank or generate 61.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Construction Bank vs. Inner Mongolia Dazhong
Performance |
| Timeline |
| China Construction Bank |
| Inner Mongolia Dazhong |
China Construction and Inner Mongolia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Inner Mongolia
The main advantage of trading using opposite China Construction and Inner Mongolia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Inner Mongolia 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 Inner Mongolia will offset losses from the drop in Inner Mongolia's long position.| China Construction vs. Tongyu Communication | China Construction vs. Zhongtong Guomai Communication | China Construction vs. Changchun Faway Automobile | China Construction vs. Allwin Telecommunication Co |
| Inner Mongolia vs. Jiangsu Financial Leasing | Inner Mongolia vs. Harbin Hatou Investment | Inner Mongolia vs. China Construction Bank | Inner Mongolia vs. Beijing Mainstreets Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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