Correlation Between China Construction and Guangzhou Shangpin
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By analyzing existing cross correlation between China Construction Bank and Guangzhou Shangpin Home, you can compare the effects of market volatilities on China Construction and Guangzhou Shangpin 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 Guangzhou Shangpin. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Guangzhou Shangpin.
Diversification Opportunities for China Construction and Guangzhou Shangpin
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Guangzhou is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Guangzhou Shangpin Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Shangpin Home 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 Guangzhou Shangpin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Shangpin Home has no effect on the direction of China Construction i.e., China Construction and Guangzhou Shangpin go up and down completely randomly.
Pair Corralation between China Construction and Guangzhou Shangpin
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.36 times more return on investment than Guangzhou Shangpin. However, China Construction Bank is 2.79 times less risky than Guangzhou Shangpin. It trades about 0.09 of its potential returns per unit of risk. Guangzhou Shangpin Home is currently generating about -0.01 per unit of risk. If you would invest 642.00 in China Construction Bank on January 25, 2025 and sell it today you would earn a total of 285.00 from holding China Construction Bank or generate 44.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Guangzhou Shangpin Home
Performance |
| Timeline |
| China Construction Bank |
| Guangzhou Shangpin Home |
China Construction and Guangzhou Shangpin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Guangzhou Shangpin
The main advantage of trading using opposite China Construction and Guangzhou Shangpin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Guangzhou Shangpin 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 Guangzhou Shangpin will offset losses from the drop in Guangzhou Shangpin's long position.| China Construction vs. Dongnan Electronics Co | China Construction vs. Dymatic Chemicals | China Construction vs. Jiangyin Jianghua Microelectronics | China Construction vs. Ningbo Bohui Chemical |
| Guangzhou Shangpin vs. Tianjin Silvery Dragon | Guangzhou Shangpin vs. Konfoong Materials International | Guangzhou Shangpin vs. Shenzhen Silver Basis | Guangzhou Shangpin vs. Chenzhou Jingui Silver |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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