Correlation Between China Construction and Dalian Zeus
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By analyzing existing cross correlation between China Construction Bank and Dalian Zeus Entertainment, you can compare the effects of market volatilities on China Construction and Dalian Zeus 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 Dalian Zeus. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Dalian Zeus.
Diversification Opportunities for China Construction and Dalian Zeus
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Dalian is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Dalian Zeus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalian Zeus Entertainment 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 Dalian Zeus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalian Zeus Entertainment has no effect on the direction of China Construction i.e., China Construction and Dalian Zeus go up and down completely randomly.
Pair Corralation between China Construction and Dalian Zeus
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Dalian Zeus. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 6.21 times less risky than Dalian Zeus. The stock trades about -0.02 of its potential returns per unit of risk. The Dalian Zeus Entertainment is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Dalian Zeus Entertainment on August 29, 2024 and sell it today you would earn a total of 161.00 from holding Dalian Zeus Entertainment or generate 43.63% 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. Dalian Zeus Entertainment
Performance |
| Timeline |
| China Construction Bank |
| Dalian Zeus Entertainment |
China Construction and Dalian Zeus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Dalian Zeus
The main advantage of trading using opposite China Construction and Dalian Zeus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Dalian Zeus 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 Dalian Zeus will offset losses from the drop in Dalian Zeus' long position.| China Construction vs. Xinjiang Tianrun Dairy | China Construction vs. HaiXin Foods Co | China Construction vs. Juewei Food Co | China Construction vs. Suzhou Douson Drilling |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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