Correlation Between China Construction and Wuxi Chemical
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By analyzing existing cross correlation between China Construction Bank and Wuxi Chemical Equipment, you can compare the effects of market volatilities on China Construction and Wuxi Chemical 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 Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Wuxi Chemical.
Diversification Opportunities for China Construction and Wuxi Chemical
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Wuxi is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment 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 Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of China Construction i.e., China Construction and Wuxi Chemical go up and down completely randomly.
Pair Corralation between China Construction and Wuxi Chemical
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.78 times more return on investment than Wuxi Chemical. However, China Construction Bank is 1.28 times less risky than Wuxi Chemical. It trades about 0.13 of its potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about -0.03 per unit of risk. If you would invest 798.00 in China Construction Bank on October 30, 2024 and sell it today you would earn a total of 56.00 from holding China Construction Bank or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
China Construction Bank vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| China Construction Bank |
| Wuxi Chemical Equipment |
China Construction and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Wuxi Chemical
The main advantage of trading using opposite China Construction and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Wuxi Chemical 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 Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| China Construction vs. Beingmate Baby Child | China Construction vs. Runjian Communication Co | China Construction vs. Fiberhome Telecommunication Technologies | China Construction vs. AUPU Home Style |
| Wuxi Chemical vs. Zhongshan Broad Ocean Motor | Wuxi Chemical vs. Zhengping RoadBridge Constr | Wuxi Chemical vs. Chahua Modern Housewares | Wuxi Chemical vs. Northern United Publishing |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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