Correlation Between China Construction and Shenzhen
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By analyzing existing cross correlation between China Construction Bank and Shenzhen AV Display Co, you can compare the effects of market volatilities on China Construction and Shenzhen 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 Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Shenzhen.
Diversification Opportunities for China Construction and Shenzhen
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shenzhen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display 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 Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of China Construction i.e., China Construction and Shenzhen go up and down completely randomly.
Pair Corralation between China Construction and Shenzhen
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Shenzhen. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 2.59 times less risky than Shenzhen. The stock trades about -0.08 of its potential returns per unit of risk. The Shenzhen AV Display Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,200 in Shenzhen AV Display Co on September 13, 2024 and sell it today you would earn a total of 228.00 from holding Shenzhen AV Display Co or generate 7.12% 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. Shenzhen AV Display Co
Performance |
| Timeline |
| China Construction Bank |
| Shenzhen AV Display |
China Construction and Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Shenzhen
The main advantage of trading using opposite China Construction and Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Shenzhen 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 Shenzhen will offset losses from the drop in Shenzhen's long position.| China Construction vs. Eastroc Beverage Group | China Construction vs. Youyou Foods Co | China Construction vs. HaiXin Foods Co | China Construction vs. Shanghai Metersbonwe FashionAccessories |
| Shenzhen vs. Industrial and Commercial | Shenzhen vs. Agricultural Bank of | Shenzhen vs. China Construction Bank | Shenzhen 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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