Correlation Between China Construction and Tonghua Grape
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By analyzing existing cross correlation between China Construction Bank and Tonghua Grape Wine, you can compare the effects of market volatilities on China Construction and Tonghua Grape 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 Tonghua Grape. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Tonghua Grape.
Diversification Opportunities for China Construction and Tonghua Grape
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Tonghua is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Tonghua Grape Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tonghua Grape Wine 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 Tonghua Grape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tonghua Grape Wine has no effect on the direction of China Construction i.e., China Construction and Tonghua Grape go up and down completely randomly.
Pair Corralation between China Construction and Tonghua Grape
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.53 times more return on investment than Tonghua Grape. However, China Construction Bank is 1.9 times less risky than Tonghua Grape. It trades about 0.08 of its potential returns per unit of risk. Tonghua Grape Wine is currently generating about -0.02 per unit of risk. If you would invest 522.00 in China Construction Bank on September 5, 2024 and sell it today you would earn a total of 285.00 from holding China Construction Bank or generate 54.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Tonghua Grape Wine
Performance |
| Timeline |
| China Construction Bank |
| Tonghua Grape Wine |
China Construction and Tonghua Grape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Tonghua Grape
The main advantage of trading using opposite China Construction and Tonghua Grape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Tonghua Grape 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 Tonghua Grape will offset losses from the drop in Tonghua Grape's long position.| China Construction vs. Beijing Sanyuan Foods | China Construction vs. By health | China Construction vs. Everjoy Health Group | China Construction vs. Shandong Huifa Foodstuff |
| Tonghua Grape vs. Industrial and Commercial | Tonghua Grape vs. Agricultural Bank of | Tonghua Grape vs. China Construction Bank | Tonghua Grape 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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