Correlation Between China Construction and Shanghai Pudong
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By analyzing existing cross correlation between China Construction Bank and Shanghai Pudong Development, you can compare the effects of market volatilities on China Construction and Shanghai Pudong 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 Shanghai Pudong. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Shanghai Pudong.
Diversification Opportunities for China Construction and Shanghai Pudong
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Shanghai is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Shanghai Pudong Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Pudong Deve 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 Shanghai Pudong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Pudong Deve has no effect on the direction of China Construction i.e., China Construction and Shanghai Pudong go up and down completely randomly.
Pair Corralation between China Construction and Shanghai Pudong
Assuming the 90 days trading horizon China Construction is expected to generate 1.92 times less return on investment than Shanghai Pudong. But when comparing it to its historical volatility, China Construction Bank is 1.0 times less risky than Shanghai Pudong. It trades about 0.06 of its potential returns per unit of risk. Shanghai Pudong Development is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Shanghai Pudong Development on August 29, 2024 and sell it today you would earn a total of 251.00 from holding Shanghai Pudong Development or generate 36.91% 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. Shanghai Pudong Development
Performance |
| Timeline |
| China Construction Bank |
| Shanghai Pudong Deve |
China Construction and Shanghai Pudong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Shanghai Pudong
The main advantage of trading using opposite China Construction and Shanghai Pudong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Shanghai Pudong 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 Shanghai Pudong will offset losses from the drop in Shanghai Pudong's long position.| China Construction vs. Xinjiang Tianrun Dairy | China Construction vs. HaiXin Foods Co | China Construction vs. Juewei Food Co | China Construction vs. Suzhou Douson Drilling |
| Shanghai Pudong vs. Hang Xiao Steel | Shanghai Pudong vs. Gansu Jiu Steel | Shanghai Pudong vs. Tianjin Capital Environmental | Shanghai Pudong vs. Eit Environmental Development |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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