Correlation Between China Construction and Dongguan Chitwing
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By analyzing existing cross correlation between China Construction Bank and Dongguan Chitwing Technology, you can compare the effects of market volatilities on China Construction and Dongguan Chitwing 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 Dongguan Chitwing. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Dongguan Chitwing.
Diversification Opportunities for China Construction and Dongguan Chitwing
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Dongguan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Dongguan Chitwing Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongguan Chitwing 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 Dongguan Chitwing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongguan Chitwing has no effect on the direction of China Construction i.e., China Construction and Dongguan Chitwing go up and down completely randomly.
Pair Corralation between China Construction and Dongguan Chitwing
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Dongguan Chitwing. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 6.0 times less risky than Dongguan Chitwing. The stock trades about -0.12 of its potential returns per unit of risk. The Dongguan Chitwing Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,337 in Dongguan Chitwing Technology on August 27, 2024 and sell it today you would earn a total of 189.00 from holding Dongguan Chitwing Technology or generate 8.09% 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. Dongguan Chitwing Technology
Performance |
| Timeline |
| China Construction Bank |
| Dongguan Chitwing |
China Construction and Dongguan Chitwing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Dongguan Chitwing
The main advantage of trading using opposite China Construction and Dongguan Chitwing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Dongguan Chitwing 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 Dongguan Chitwing will offset losses from the drop in Dongguan Chitwing's long position.| China Construction vs. Threes Company Media | China Construction vs. Omnijoi Media Corp | China Construction vs. Nanxing Furniture Machinery | China Construction vs. Qumei Furniture Group |
| Dongguan Chitwing vs. Agricultural Bank of | Dongguan Chitwing vs. Industrial and Commercial | Dongguan Chitwing vs. Bank of China | Dongguan Chitwing vs. PetroChina Co Ltd |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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