Correlation Between China Construction and Winner Medical
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By analyzing existing cross correlation between China Construction Bank and Winner Medical Co, you can compare the effects of market volatilities on China Construction and Winner Medical 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 Winner Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Winner Medical.
Diversification Opportunities for China Construction and Winner Medical
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Winner is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Winner Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winner Medical 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 Winner Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winner Medical has no effect on the direction of China Construction i.e., China Construction and Winner Medical go up and down completely randomly.
Pair Corralation between China Construction and Winner Medical
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Winner Medical. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 1.71 times less risky than Winner Medical. The stock trades about -0.16 of its potential returns per unit of risk. The Winner Medical Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,195 in Winner Medical Co on October 26, 2024 and sell it today you would lose (153.00) from holding Winner Medical Co or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Winner Medical Co
Performance |
| Timeline |
| China Construction Bank |
| Winner Medical |
China Construction and Winner Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Winner Medical
The main advantage of trading using opposite China Construction and Winner Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Winner Medical 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 Winner Medical will offset losses from the drop in Winner Medical's long position.The idea behind China Construction Bank and Winner Medical Co 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.
| Winner Medical vs. Agricultural Bank of | Winner Medical vs. Industrial and Commercial | Winner Medical vs. Bank of China | Winner Medical vs. China Construction Bank |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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