Correlation Between China Construction and ButOne Information
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By analyzing existing cross correlation between China Construction Bank and ButOne Information Corp, you can compare the effects of market volatilities on China Construction and ButOne Information 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 ButOne Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and ButOne Information.
Diversification Opportunities for China Construction and ButOne Information
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and ButOne is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and ButOne Information Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ButOne Information Corp 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 ButOne Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ButOne Information Corp has no effect on the direction of China Construction i.e., China Construction and ButOne Information go up and down completely randomly.
Pair Corralation between China Construction and ButOne Information
Assuming the 90 days trading horizon China Construction is expected to generate 3.2 times less return on investment than ButOne Information. But when comparing it to its historical volatility, China Construction Bank is 2.03 times less risky than ButOne Information. It trades about 0.07 of its potential returns per unit of risk. ButOne Information Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,610 in ButOne Information Corp on September 1, 2024 and sell it today you would earn a total of 738.00 from holding ButOne Information Corp or generate 45.84% 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. ButOne Information Corp
Performance |
| Timeline |
| China Construction Bank |
| ButOne Information Corp |
China Construction and ButOne Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and ButOne Information
The main advantage of trading using opposite China Construction and ButOne Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, ButOne Information 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 ButOne Information will offset losses from the drop in ButOne Information's long position.The idea behind China Construction Bank and ButOne Information Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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