Correlation Between China Construction and Tianjin Hi
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By analyzing existing cross correlation between China Construction Bank and Tianjin Hi Tech Development, you can compare the effects of market volatilities on China Construction and Tianjin Hi 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 Tianjin Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Tianjin Hi.
Diversification Opportunities for China Construction and Tianjin Hi
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Tianjin is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Tianjin Hi Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Hi Tech 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 Tianjin Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Hi Tech has no effect on the direction of China Construction i.e., China Construction and Tianjin Hi go up and down completely randomly.
Pair Corralation between China Construction and Tianjin Hi
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.39 times more return on investment than Tianjin Hi. However, China Construction Bank is 2.56 times less risky than Tianjin Hi. It trades about 0.09 of its potential returns per unit of risk. Tianjin Hi Tech Development is currently generating about 0.02 per unit of risk. If you would invest 644.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 187.00 from holding China Construction Bank or generate 29.04% 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. Tianjin Hi Tech Development
Performance |
| Timeline |
| China Construction Bank |
| Tianjin Hi Tech |
China Construction and Tianjin Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Tianjin Hi
The main advantage of trading using opposite China Construction and Tianjin Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Tianjin Hi 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 Tianjin Hi will offset losses from the drop in Tianjin Hi's long position.| China Construction vs. Tongyu Communication | China Construction vs. Zhongtong Guomai Communication | China Construction vs. Changchun Faway Automobile | China Construction vs. Allwin Telecommunication Co |
| Tianjin Hi vs. Industrial and Commercial | Tianjin Hi vs. Agricultural Bank of | Tianjin Hi vs. China Construction Bank | Tianjin Hi 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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