Correlation Between China Construction and Wenzhou Hongfeng
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By analyzing existing cross correlation between China Construction Bank and Wenzhou Hongfeng Electrical, you can compare the effects of market volatilities on China Construction and Wenzhou Hongfeng 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 Wenzhou Hongfeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Wenzhou Hongfeng.
Diversification Opportunities for China Construction and Wenzhou Hongfeng
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Wenzhou is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Wenzhou Hongfeng Electrical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Hongfeng Ele 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 Wenzhou Hongfeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Hongfeng Ele has no effect on the direction of China Construction i.e., China Construction and Wenzhou Hongfeng go up and down completely randomly.
Pair Corralation between China Construction and Wenzhou Hongfeng
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.31 times more return on investment than Wenzhou Hongfeng. However, China Construction Bank is 3.18 times less risky than Wenzhou Hongfeng. It trades about 0.23 of its potential returns per unit of risk. Wenzhou Hongfeng Electrical is currently generating about 0.05 per unit of risk. If you would invest 785.00 in China Construction Bank on September 13, 2024 and sell it today you would earn a total of 36.00 from holding China Construction Bank or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Wenzhou Hongfeng Electrical
Performance |
| Timeline |
| China Construction Bank |
| Wenzhou Hongfeng Ele |
China Construction and Wenzhou Hongfeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Wenzhou Hongfeng
The main advantage of trading using opposite China Construction and Wenzhou Hongfeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Wenzhou Hongfeng 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 Wenzhou Hongfeng will offset losses from the drop in Wenzhou Hongfeng's long position.| China Construction vs. Eastroc Beverage Group | China Construction vs. Youyou Foods Co | China Construction vs. HaiXin Foods Co | China Construction vs. Shanghai Metersbonwe FashionAccessories |
| Wenzhou Hongfeng vs. YLZ Information Tech | Wenzhou Hongfeng vs. Xiamen Goldenhome Co | Wenzhou Hongfeng vs. ButOne Information Corp | Wenzhou Hongfeng vs. Nanxing Furniture Machinery |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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