Correlation Between China Construction and China Sports
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By analyzing existing cross correlation between China Construction Bank and China Sports Industry, you can compare the effects of market volatilities on China Construction and China Sports 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 China Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and China Sports.
Diversification Opportunities for China Construction and China Sports
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and China is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and China Sports Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Sports Industry 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 China Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Sports Industry has no effect on the direction of China Construction i.e., China Construction and China Sports go up and down completely randomly.
Pair Corralation between China Construction and China Sports
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the China Sports. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 2.57 times less risky than China Sports. The stock trades about -0.21 of its potential returns per unit of risk. The China Sports Industry is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 770.00 in China Sports Industry on August 25, 2024 and sell it today you would earn a total of 24.00 from holding China Sports Industry or generate 3.12% 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. China Sports Industry
Performance |
| Timeline |
| China Construction Bank |
| China Sports Industry |
China Construction and China Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and China Sports
The main advantage of trading using opposite China Construction and China Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, China Sports 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 China Sports will offset losses from the drop in China Sports' long position.| China Construction vs. Zhengzhou Qianweiyangchu Food | China Construction vs. Panda Dairy Corp | China Construction vs. Youyou Foods Co | China Construction vs. Zhongyin Babi Food |
| China Sports vs. Industrial and Commercial | China Sports vs. China Construction Bank | China Sports vs. Bank of China | China Sports vs. Agricultural Bank of |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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