Correlation Between China Construction and Zhejiang Construction
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By analyzing existing cross correlation between China Construction Bank and Zhejiang Construction Investment, you can compare the effects of market volatilities on China Construction and Zhejiang Construction 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 Zhejiang Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Zhejiang Construction.
Diversification Opportunities for China Construction and Zhejiang Construction
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Zhejiang is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Zhejiang Construction Investme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Construction 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 Zhejiang Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Construction has no effect on the direction of China Construction i.e., China Construction and Zhejiang Construction go up and down completely randomly.
Pair Corralation between China Construction and Zhejiang Construction
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Zhejiang Construction. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 5.66 times less risky than Zhejiang Construction. The stock trades about -0.02 of its potential returns per unit of risk. The Zhejiang Construction Investment is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Zhejiang Construction Investment on August 29, 2024 and sell it today you would earn a total of 167.00 from holding Zhejiang Construction Investment or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Construction Bank vs. Zhejiang Construction Investme
Performance |
| Timeline |
| China Construction Bank |
| Zhejiang Construction |
China Construction and Zhejiang Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Zhejiang Construction
The main advantage of trading using opposite China Construction and Zhejiang Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Zhejiang Construction 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 Zhejiang Construction will offset losses from the drop in Zhejiang Construction'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 |
| Zhejiang Construction vs. Agricultural Bank of | Zhejiang Construction vs. Industrial and Commercial | Zhejiang Construction vs. Bank of China | Zhejiang Construction vs. China Construction Bank |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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