Correlation Between China Construction and Anshan Senyuan
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By analyzing existing cross correlation between China Construction Bank and Anshan Senyuan Road, you can compare the effects of market volatilities on China Construction and Anshan Senyuan 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 Anshan Senyuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Anshan Senyuan.
Diversification Opportunities for China Construction and Anshan Senyuan
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Anshan is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Anshan Senyuan Road in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anshan Senyuan Road 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 Anshan Senyuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anshan Senyuan Road has no effect on the direction of China Construction i.e., China Construction and Anshan Senyuan go up and down completely randomly.
Pair Corralation between China Construction and Anshan Senyuan
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.34 times more return on investment than Anshan Senyuan. However, China Construction Bank is 2.96 times less risky than Anshan Senyuan. It trades about 0.08 of its potential returns per unit of risk. Anshan Senyuan Road is currently generating about -0.22 per unit of risk. If you would invest 801.00 in China Construction Bank on October 26, 2024 and sell it today you would earn a total of 43.00 from holding China Construction Bank or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Anshan Senyuan Road
Performance |
| Timeline |
| China Construction Bank |
| Anshan Senyuan Road |
China Construction and Anshan Senyuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Anshan Senyuan
The main advantage of trading using opposite China Construction and Anshan Senyuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Anshan Senyuan 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 Anshan Senyuan will offset losses from the drop in Anshan Senyuan's long position.The idea behind China Construction Bank and Anshan Senyuan Road pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Anshan Senyuan vs. Industrial and Commercial | Anshan Senyuan vs. Agricultural Bank of | Anshan Senyuan vs. China Construction Bank | Anshan Senyuan 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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