Correlation Between China Construction and Longmaster Information
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By analyzing existing cross correlation between China Construction Bank and Longmaster Information Tech, you can compare the effects of market volatilities on China Construction and Longmaster Information 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 Longmaster Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Longmaster Information.
Diversification Opportunities for China Construction and Longmaster Information
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Longmaster is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Longmaster Information Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longmaster Information 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 Longmaster Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longmaster Information has no effect on the direction of China Construction i.e., China Construction and Longmaster Information go up and down completely randomly.
Pair Corralation between China Construction and Longmaster Information
Assuming the 90 days trading horizon China Construction is expected to generate 3.54 times less return on investment than Longmaster Information. But when comparing it to its historical volatility, China Construction Bank is 2.36 times less risky than Longmaster Information. It trades about 0.09 of its potential returns per unit of risk. Longmaster Information Tech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Longmaster Information Tech on September 12, 2024 and sell it today you would earn a total of 791.00 from holding Longmaster Information Tech or generate 70.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Longmaster Information Tech
Performance |
| Timeline |
| China Construction Bank |
| Longmaster Information |
China Construction and Longmaster Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Longmaster Information
The main advantage of trading using opposite China Construction and Longmaster Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Longmaster Information 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 Longmaster Information will offset losses from the drop in Longmaster Information's long position.| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
| Longmaster Information vs. Cultural Investment Holdings | Longmaster Information vs. Gome Telecom Equipment | Longmaster Information vs. Holitech Technology Co | Longmaster Information vs. Zotye Automobile 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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