Correlation Between China Construction and Tongxing Environmental
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By analyzing existing cross correlation between China Construction Bank and Tongxing Environmental Protection, you can compare the effects of market volatilities on China Construction and Tongxing Environmental 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 Tongxing Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Tongxing Environmental.
Diversification Opportunities for China Construction and Tongxing Environmental
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Tongxing is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Tongxing Environmental Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tongxing Environmental 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 Tongxing Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tongxing Environmental has no effect on the direction of China Construction i.e., China Construction and Tongxing Environmental go up and down completely randomly.
Pair Corralation between China Construction and Tongxing Environmental
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Tongxing Environmental. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 1.55 times less risky than Tongxing Environmental. The stock trades about -0.14 of its potential returns per unit of risk. The Tongxing Environmental Protection is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,547 in Tongxing Environmental Protection on October 29, 2024 and sell it today you would lose (67.00) from holding Tongxing Environmental Protection or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Tongxing Environmental Protect
Performance |
| Timeline |
| China Construction Bank |
| Tongxing Environmental |
China Construction and Tongxing Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Tongxing Environmental
The main advantage of trading using opposite China Construction and Tongxing Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Tongxing Environmental 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 Tongxing Environmental will offset losses from the drop in Tongxing Environmental's long position.| China Construction vs. Guangdong Transtek Medical | China Construction vs. Shandong Intco Medical | China Construction vs. Hengkang Medical Group | China Construction vs. Bomesc Offshore Engineering |
| Tongxing Environmental vs. Industrial and Commercial | Tongxing Environmental vs. Agricultural Bank of | Tongxing Environmental vs. China Construction Bank | Tongxing Environmental vs. Bank of China |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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