Correlation Between China Construction and State Grid
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By analyzing existing cross correlation between China Construction Bank and State Grid InformationCommunication, you can compare the effects of market volatilities on China Construction and State Grid 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 State Grid. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and State Grid.
Diversification Opportunities for China Construction and State Grid
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and State is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and State Grid InformationCommunic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Grid Informati 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 State Grid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Grid Informati has no effect on the direction of China Construction i.e., China Construction and State Grid go up and down completely randomly.
Pair Corralation between China Construction and State Grid
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.3 times more return on investment than State Grid. However, China Construction Bank is 3.35 times less risky than State Grid. It trades about 0.34 of its potential returns per unit of risk. State Grid InformationCommunication is currently generating about -0.16 per unit of risk. If you would invest 790.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 47.00 from holding China Construction Bank or generate 5.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. State Grid InformationCommunic
Performance |
| Timeline |
| China Construction Bank |
| State Grid Informati |
China Construction and State Grid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and State Grid
The main advantage of trading using opposite China Construction and State Grid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, State Grid 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 State Grid will offset losses from the drop in State Grid's long position.| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
| State Grid vs. Gansu Jiu Steel | State Grid vs. Shandong Mining Machinery | State Grid vs. Aba Chemicals Corp | State Grid vs. BlueFocus Communication Group |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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