Correlation Between China Construction and Guangdong Electric
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By analyzing existing cross correlation between China Construction Bank and Guangdong Electric Power, you can compare the effects of market volatilities on China Construction and Guangdong Electric 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 Guangdong Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Guangdong Electric.
Diversification Opportunities for China Construction and Guangdong Electric
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Guangdong is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Guangdong Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Electric Power 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 Guangdong Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Electric Power has no effect on the direction of China Construction i.e., China Construction and Guangdong Electric go up and down completely randomly.
Pair Corralation between China Construction and Guangdong Electric
Assuming the 90 days trading horizon China Construction Bank is expected to generate 1.32 times more return on investment than Guangdong Electric. However, China Construction is 1.32 times more volatile than Guangdong Electric Power. It trades about 0.08 of its potential returns per unit of risk. Guangdong Electric Power is currently generating about -0.01 per unit of risk. If you would invest 529.00 in China Construction Bank on October 15, 2024 and sell it today you would earn a total of 316.00 from holding China Construction Bank or generate 59.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Guangdong Electric Power
Performance |
| Timeline |
| China Construction Bank |
| Guangdong Electric Power |
China Construction and Guangdong Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Guangdong Electric
The main advantage of trading using opposite China Construction and Guangdong Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Guangdong Electric 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 Guangdong Electric will offset losses from the drop in Guangdong Electric's long position.| China Construction vs. Jilin Chemical Fibre | China Construction vs. Liuzhou Chemical Industry | China Construction vs. Hainan Haiqi Transportation | China Construction vs. Longxing Chemical Stock |
| Guangdong Electric vs. Everdisplay Optronics Shanghai | Guangdong Electric vs. Lontium Semiconductor Corp | Guangdong Electric vs. GRINM Semiconductor Materials | Guangdong Electric vs. Chongqing Brewery 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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