Correlation Between China Construction and Fujian Longzhou
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By analyzing existing cross correlation between China Construction Bank and Fujian Longzhou Transportation, you can compare the effects of market volatilities on China Construction and Fujian Longzhou 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 Fujian Longzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Fujian Longzhou.
Diversification Opportunities for China Construction and Fujian Longzhou
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Fujian is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Fujian Longzhou Transportation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Longzhou Tran 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 Fujian Longzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Longzhou Tran has no effect on the direction of China Construction i.e., China Construction and Fujian Longzhou go up and down completely randomly.
Pair Corralation between China Construction and Fujian Longzhou
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.32 times more return on investment than Fujian Longzhou. However, China Construction Bank is 3.1 times less risky than Fujian Longzhou. It trades about 0.08 of its potential returns per unit of risk. Fujian Longzhou Transportation is currently generating about 0.0 per unit of risk. If you would invest 642.00 in China Construction Bank on August 29, 2024 and sell it today you would earn a total of 156.00 from holding China Construction Bank or generate 24.3% 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. Fujian Longzhou Transportation
Performance |
| Timeline |
| China Construction Bank |
| Fujian Longzhou Tran |
China Construction and Fujian Longzhou Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Fujian Longzhou
The main advantage of trading using opposite China Construction and Fujian Longzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Fujian Longzhou 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 Fujian Longzhou will offset losses from the drop in Fujian Longzhou's 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 |
| Fujian Longzhou vs. PetroChina Co Ltd | Fujian Longzhou vs. China State Construction | Fujian Longzhou vs. China Mobile Limited | Fujian Longzhou vs. Industrial and Commercial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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