Correlation Between China Construction and Jinlong Machinery
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By analyzing existing cross correlation between China Construction Bank and Jinlong Machinery Electronic, you can compare the effects of market volatilities on China Construction and Jinlong Machinery 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 Jinlong Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Jinlong Machinery.
Diversification Opportunities for China Construction and Jinlong Machinery
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Jinlong is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Jinlong Machinery Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinlong Machinery 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 Jinlong Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinlong Machinery has no effect on the direction of China Construction i.e., China Construction and Jinlong Machinery go up and down completely randomly.
Pair Corralation between China Construction and Jinlong Machinery
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.33 times more return on investment than Jinlong Machinery. However, China Construction Bank is 3.03 times less risky than Jinlong Machinery. It trades about 0.09 of its potential returns per unit of risk. Jinlong Machinery Electronic is currently generating about 0.01 per unit of risk. If you would invest 529.00 in China Construction Bank on October 11, 2024 and sell it today you would earn a total of 355.00 from holding China Construction Bank or generate 67.11% 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. Jinlong Machinery Electronic
Performance |
| Timeline |
| China Construction Bank |
| Jinlong Machinery |
China Construction and Jinlong Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Jinlong Machinery
The main advantage of trading using opposite China Construction and Jinlong Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Jinlong Machinery 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 Jinlong Machinery will offset losses from the drop in Jinlong Machinery's long position.| China Construction vs. Chengdu Xinzhu RoadBridge | China Construction vs. Heilongjiang Transport Development | China Construction vs. Xinjiang Beixin RoadBridge | China Construction vs. Muyuan Foodstuff Co |
| Jinlong Machinery vs. Tsingtao Brewery Co | Jinlong Machinery vs. Suzhou Weizhixiang Food | Jinlong Machinery vs. Xiangpiaopiao Food Co | Jinlong Machinery vs. Dazhong Transportation Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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