Correlation Between China Construction and Beijing Tiantan
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By analyzing existing cross correlation between China Construction Bank and Beijing Tiantan Biological, you can compare the effects of market volatilities on China Construction and Beijing Tiantan 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 Beijing Tiantan. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Beijing Tiantan.
Diversification Opportunities for China Construction and Beijing Tiantan
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Beijing is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Beijing Tiantan Biological in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Tiantan Biol 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 Beijing Tiantan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Tiantan Biol has no effect on the direction of China Construction i.e., China Construction and Beijing Tiantan go up and down completely randomly.
Pair Corralation between China Construction and Beijing Tiantan
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.62 times more return on investment than Beijing Tiantan. However, China Construction Bank is 1.62 times less risky than Beijing Tiantan. It trades about 0.09 of its potential returns per unit of risk. Beijing Tiantan Biological is currently generating about 0.01 per unit of risk. If you would invest 516.00 in China Construction Bank on September 14, 2024 and sell it today you would earn a total of 315.00 from holding China Construction Bank or generate 61.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
China Construction Bank vs. Beijing Tiantan Biological
Performance |
| Timeline |
| China Construction Bank |
| Beijing Tiantan Biol |
China Construction and Beijing Tiantan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Beijing Tiantan
The main advantage of trading using opposite China Construction and Beijing Tiantan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Beijing Tiantan 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 Beijing Tiantan will offset losses from the drop in Beijing Tiantan'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 |
| Beijing Tiantan vs. Industrial and Commercial | Beijing Tiantan vs. China Construction Bank | Beijing Tiantan vs. Bank of China | Beijing Tiantan 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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