Correlation Between China Construction and YiDong Electronics
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By analyzing existing cross correlation between China Construction Bank and YiDong Electronics Technology, you can compare the effects of market volatilities on China Construction and YiDong Electronics 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 YiDong Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and YiDong Electronics.
Diversification Opportunities for China Construction and YiDong Electronics
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and YiDong is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and YiDong Electronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YiDong Electronics 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 YiDong Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YiDong Electronics has no effect on the direction of China Construction i.e., China Construction and YiDong Electronics go up and down completely randomly.
Pair Corralation between China Construction and YiDong Electronics
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the YiDong Electronics. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 2.35 times less risky than YiDong Electronics. The stock trades about -0.08 of its potential returns per unit of risk. The YiDong Electronics Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,923 in YiDong Electronics Technology on September 13, 2024 and sell it today you would earn a total of 203.00 from holding YiDong Electronics Technology or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. YiDong Electronics Technology
Performance |
| Timeline |
| China Construction Bank |
| YiDong Electronics |
China Construction and YiDong Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and YiDong Electronics
The main advantage of trading using opposite China Construction and YiDong Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, YiDong Electronics 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 YiDong Electronics will offset losses from the drop in YiDong Electronics' 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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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