Correlation Between China Construction and Jilin Jlu
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By analyzing existing cross correlation between China Construction Bank and Jilin Jlu Communication, you can compare the effects of market volatilities on China Construction and Jilin Jlu 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 Jilin Jlu. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Jilin Jlu.
Diversification Opportunities for China Construction and Jilin Jlu
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Jilin is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Jilin Jlu Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jilin Jlu Communication 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 Jilin Jlu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jilin Jlu Communication has no effect on the direction of China Construction i.e., China Construction and Jilin Jlu go up and down completely randomly.
Pair Corralation between China Construction and Jilin Jlu
Assuming the 90 days trading horizon China Construction is expected to generate 2.38 times less return on investment than Jilin Jlu. But when comparing it to its historical volatility, China Construction Bank is 2.18 times less risky than Jilin Jlu. It trades about 0.07 of its potential returns per unit of risk. Jilin Jlu Communication is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 681.00 in Jilin Jlu Communication on October 26, 2024 and sell it today you would earn a total of 172.00 from holding Jilin Jlu Communication or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Jilin Jlu Communication
Performance |
| Timeline |
| China Construction Bank |
| Jilin Jlu Communication |
China Construction and Jilin Jlu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Jilin Jlu
The main advantage of trading using opposite China Construction and Jilin Jlu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Jilin Jlu 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 Jilin Jlu will offset losses from the drop in Jilin Jlu's long position.The idea behind China Construction Bank and Jilin Jlu Communication 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.
| Jilin Jlu vs. Industrial and Commercial | Jilin Jlu vs. China Construction Bank | Jilin Jlu vs. Agricultural Bank of | Jilin Jlu 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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