Correlation Between China Construction and Masterwork Machinery
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By analyzing existing cross correlation between China Construction Bank and Masterwork Machinery, you can compare the effects of market volatilities on China Construction and Masterwork 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 Masterwork Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Masterwork Machinery.
Diversification Opportunities for China Construction and Masterwork Machinery
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Masterwork is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Masterwork Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Masterwork 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 Masterwork Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Masterwork Machinery has no effect on the direction of China Construction i.e., China Construction and Masterwork Machinery go up and down completely randomly.
Pair Corralation between China Construction and Masterwork Machinery
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Masterwork Machinery. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 1.97 times less risky than Masterwork Machinery. The stock trades about -0.13 of its potential returns per unit of risk. The Masterwork Machinery is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 594.00 in Masterwork Machinery on October 28, 2024 and sell it today you would lose (24.00) from holding Masterwork Machinery or give up 4.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Masterwork Machinery
Performance |
| Timeline |
| China Construction Bank |
| Masterwork Machinery |
China Construction and Masterwork Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Masterwork Machinery
The main advantage of trading using opposite China Construction and Masterwork Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Masterwork 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 Masterwork Machinery will offset losses from the drop in Masterwork Machinery's long position.| China Construction vs. Youyou Foods Co | China Construction vs. Shenzhen AV Display Co | China Construction vs. Sportsoul Co Ltd | China Construction vs. HaiXin Foods 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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