Correlation Between China Construction and Hang Xiao
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By analyzing existing cross correlation between China Construction Bank and Hang Xiao Steel, you can compare the effects of market volatilities on China Construction and Hang Xiao 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 Hang Xiao. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Hang Xiao.
Diversification Opportunities for China Construction and Hang Xiao
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Hang is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Hang Xiao Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hang Xiao Steel 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 Hang Xiao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hang Xiao Steel has no effect on the direction of China Construction i.e., China Construction and Hang Xiao go up and down completely randomly.
Pair Corralation between China Construction and Hang Xiao
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Hang Xiao. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 3.02 times less risky than Hang Xiao. The stock trades about -0.18 of its potential returns per unit of risk. The Hang Xiao Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Hang Xiao Steel on August 26, 2024 and sell it today you would earn a total of 3.00 from holding Hang Xiao Steel or generate 1.1% 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. Hang Xiao Steel
Performance |
| Timeline |
| China Construction Bank |
| Hang Xiao Steel |
China Construction and Hang Xiao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Hang Xiao
The main advantage of trading using opposite China Construction and Hang Xiao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Hang Xiao 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 Hang Xiao will offset losses from the drop in Hang Xiao's long position.| China Construction vs. Longjian Road Bridge | China Construction vs. Dazhong Transportation Group | China Construction vs. Silkroad Visual Technology | China Construction vs. Road Environment Technology |
| Hang Xiao vs. Industrial and Commercial | Hang Xiao vs. Agricultural Bank of | Hang Xiao vs. China Construction Bank | Hang Xiao 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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