Correlation Between China Construction and BlueFocus Communication
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By analyzing existing cross correlation between China Construction Bank and BlueFocus Communication Group, you can compare the effects of market volatilities on China Construction and BlueFocus Communication 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 BlueFocus Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and BlueFocus Communication.
Diversification Opportunities for China Construction and BlueFocus Communication
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and BlueFocus is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and BlueFocus Communication Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlueFocus Communication 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 BlueFocus Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlueFocus Communication has no effect on the direction of China Construction i.e., China Construction and BlueFocus Communication go up and down completely randomly.
Pair Corralation between China Construction and BlueFocus Communication
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the BlueFocus Communication. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 8.27 times less risky than BlueFocus Communication. The stock trades about -0.12 of its potential returns per unit of risk. The BlueFocus Communication Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 760.00 in BlueFocus Communication Group on August 27, 2024 and sell it today you would earn a total of 277.00 from holding BlueFocus Communication Group or generate 36.45% 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. BlueFocus Communication Group
Performance |
| Timeline |
| China Construction Bank |
| BlueFocus Communication |
China Construction and BlueFocus Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and BlueFocus Communication
The main advantage of trading using opposite China Construction and BlueFocus Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, BlueFocus Communication 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 BlueFocus Communication will offset losses from the drop in BlueFocus Communication'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 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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