Correlation Between China Construction and Minami Acoustics
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By analyzing existing cross correlation between China Construction Bank and Minami Acoustics Ltd, you can compare the effects of market volatilities on China Construction and Minami Acoustics 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 Minami Acoustics. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Minami Acoustics.
Diversification Opportunities for China Construction and Minami Acoustics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Minami is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Minami Acoustics Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minami Acoustics 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 Minami Acoustics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minami Acoustics has no effect on the direction of China Construction i.e., China Construction and Minami Acoustics go up and down completely randomly.
Pair Corralation between China Construction and Minami Acoustics
Assuming the 90 days trading horizon China Construction is expected to generate 3.79 times less return on investment than Minami Acoustics. But when comparing it to its historical volatility, China Construction Bank is 3.0 times less risky than Minami Acoustics. It trades about 0.07 of its potential returns per unit of risk. Minami Acoustics Ltd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,526 in Minami Acoustics Ltd on September 3, 2024 and sell it today you would earn a total of 1,174 from holding Minami Acoustics Ltd or generate 46.48% 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. Minami Acoustics Ltd
Performance |
| Timeline |
| China Construction Bank |
| Minami Acoustics |
China Construction and Minami Acoustics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Minami Acoustics
The main advantage of trading using opposite China Construction and Minami Acoustics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Minami Acoustics 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 Minami Acoustics will offset losses from the drop in Minami Acoustics' long position.| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
| Minami Acoustics vs. CITIC Metal Co | Minami Acoustics vs. Rising Nonferrous Metals | Minami Acoustics vs. Sino Platinum Metals Co | Minami Acoustics vs. CITIC Guoan Information |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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