Correlation Between China Construction and Der International
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By analyzing existing cross correlation between China Construction Bank and Der International Home, you can compare the effects of market volatilities on China Construction and Der International 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 Der International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Der International.
Diversification Opportunities for China Construction and Der International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Der is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Der International Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Der International Home 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 Der International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Der International Home has no effect on the direction of China Construction i.e., China Construction and Der International go up and down completely randomly.
Pair Corralation between China Construction and Der International
Assuming the 90 days trading horizon China Construction is expected to generate 11.95 times less return on investment than Der International. But when comparing it to its historical volatility, China Construction Bank is 3.52 times less risky than Der International. It trades about 0.08 of its potential returns per unit of risk. Der International Home is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 444.00 in Der International Home on August 31, 2024 and sell it today you would earn a total of 87.00 from holding Der International Home or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Der International Home
Performance |
| Timeline |
| China Construction Bank |
| Der International Home |
China Construction and Der International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Der International
The main advantage of trading using opposite China Construction and Der International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Der International 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 Der International will offset losses from the drop in Der International's long position.| China Construction vs. Guangdong Jinming Machinery | China Construction vs. Postal Savings Bank | China Construction vs. Peoples Insurance of | China Construction vs. Allied Machinery Co |
| Der International vs. Cultural Investment Holdings | Der International vs. Gome Telecom Equipment | Der International vs. Bus Online Co | Der International vs. Holitech Technology Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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