Correlation Between China Construction and Guangdong Wens
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By analyzing existing cross correlation between China Construction Bank and Guangdong Wens Foodstuff, you can compare the effects of market volatilities on China Construction and Guangdong Wens 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 Guangdong Wens. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Guangdong Wens.
Diversification Opportunities for China Construction and Guangdong Wens
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Guangdong is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Guangdong Wens Foodstuff in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Wens Foodstuff 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 Guangdong Wens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Wens Foodstuff has no effect on the direction of China Construction i.e., China Construction and Guangdong Wens go up and down completely randomly.
Pair Corralation between China Construction and Guangdong Wens
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.64 times more return on investment than Guangdong Wens. However, China Construction Bank is 1.57 times less risky than Guangdong Wens. It trades about 0.08 of its potential returns per unit of risk. Guangdong Wens Foodstuff is currently generating about 0.0 per unit of risk. If you would invest 529.00 in China Construction Bank on September 3, 2024 and sell it today you would earn a total of 269.00 from holding China Construction Bank or generate 50.85% 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. Guangdong Wens Foodstuff
Performance |
| Timeline |
| China Construction Bank |
| Guangdong Wens Foodstuff |
China Construction and Guangdong Wens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Guangdong Wens
The main advantage of trading using opposite China Construction and Guangdong Wens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Guangdong Wens 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 Guangdong Wens will offset losses from the drop in Guangdong Wens' long position.| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
| Guangdong Wens vs. Beijing Wantai Biological | Guangdong Wens vs. Aluminum Corp of | Guangdong Wens vs. COL Digital Publishing | Guangdong Wens vs. Shaanxi Meineng Clean |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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