Correlation Between China Construction and Shijiazhuang Yiling
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By analyzing existing cross correlation between China Construction Bank and Shijiazhuang Yiling Pharmaceutical, you can compare the effects of market volatilities on China Construction and Shijiazhuang Yiling 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 Shijiazhuang Yiling. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Shijiazhuang Yiling.
Diversification Opportunities for China Construction and Shijiazhuang Yiling
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shijiazhuang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Shijiazhuang Yiling Pharmaceut in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shijiazhuang Yiling 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 Shijiazhuang Yiling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shijiazhuang Yiling has no effect on the direction of China Construction i.e., China Construction and Shijiazhuang Yiling go up and down completely randomly.
Pair Corralation between China Construction and Shijiazhuang Yiling
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.53 times more return on investment than Shijiazhuang Yiling. However, China Construction Bank is 1.87 times less risky than Shijiazhuang Yiling. It trades about 0.34 of its potential returns per unit of risk. Shijiazhuang Yiling Pharmaceutical is currently generating about -0.16 per unit of risk. If you would invest 790.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 47.00 from holding China Construction Bank or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Construction Bank vs. Shijiazhuang Yiling Pharmaceut
Performance |
| Timeline |
| China Construction Bank |
| Shijiazhuang Yiling |
China Construction and Shijiazhuang Yiling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Shijiazhuang Yiling
The main advantage of trading using opposite China Construction and Shijiazhuang Yiling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Shijiazhuang Yiling 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 Shijiazhuang Yiling will offset losses from the drop in Shijiazhuang Yiling's long position.| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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