Correlation Between China Construction and Changshu Tianyin
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By analyzing existing cross correlation between China Construction Bank and Changshu Tianyin Electromechan, you can compare the effects of market volatilities on China Construction and Changshu Tianyin 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 Changshu Tianyin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Changshu Tianyin.
Diversification Opportunities for China Construction and Changshu Tianyin
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Changshu is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Changshu Tianyin Electromechan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Changshu Tianyin 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 Changshu Tianyin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Changshu Tianyin Ele has no effect on the direction of China Construction i.e., China Construction and Changshu Tianyin go up and down completely randomly.
Pair Corralation between China Construction and Changshu Tianyin
Assuming the 90 days trading horizon China Construction is expected to generate 4.19 times less return on investment than Changshu Tianyin. But when comparing it to its historical volatility, China Construction Bank is 2.68 times less risky than Changshu Tianyin. It trades about 0.07 of its potential returns per unit of risk. Changshu Tianyin Electromechan is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,689 in Changshu Tianyin Electromechan on December 4, 2024 and sell it today you would earn a total of 103.00 from holding Changshu Tianyin Electromechan or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
China Construction Bank vs. Changshu Tianyin Electromechan
Performance |
| Timeline |
| China Construction Bank |
| Changshu Tianyin Ele |
China Construction and Changshu Tianyin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Changshu Tianyin
The main advantage of trading using opposite China Construction and Changshu Tianyin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Changshu Tianyin 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 Changshu Tianyin will offset losses from the drop in Changshu Tianyin's long position.| China Construction vs. Sinofibers Technology Co | China Construction vs. Keda Clean Energy | China Construction vs. Cansino Biologics | China Construction vs. Tianjin Ruixin Technology |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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