Correlation Between China Construction and Bank of Qingdao
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By analyzing existing cross correlation between China Construction Bank and Bank of Qingdao, you can compare the effects of market volatilities on China Construction and Bank of Qingdao 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 Bank of Qingdao. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Bank of Qingdao.
Diversification Opportunities for China Construction and Bank of Qingdao
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Bank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Bank of Qingdao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Qingdao 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 Bank of Qingdao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Qingdao has no effect on the direction of China Construction i.e., China Construction and Bank of Qingdao go up and down completely randomly.
Pair Corralation between China Construction and Bank of Qingdao
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.88 times more return on investment than Bank of Qingdao. However, China Construction Bank is 1.14 times less risky than Bank of Qingdao. It trades about 0.07 of its potential returns per unit of risk. Bank of Qingdao is currently generating about 0.06 per unit of risk. If you would invest 707.00 in China Construction Bank on September 3, 2024 and sell it today you would earn a total of 91.00 from holding China Construction Bank or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Bank of Qingdao
Performance |
| Timeline |
| China Construction Bank |
| Bank of Qingdao |
China Construction and Bank of Qingdao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Bank of Qingdao
The main advantage of trading using opposite China Construction and Bank of Qingdao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Bank of Qingdao 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 Bank of Qingdao will offset losses from the drop in Bank of Qingdao's long position.| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
| Bank of Qingdao vs. AVCON Information Tech | Bank of Qingdao vs. Guangzhou Ruoyuchen Information | Bank of Qingdao vs. Focus Media Information | Bank of Qingdao vs. Lonkey Industrial 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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