Correlation Between China Construction and Sinotrans
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By analyzing existing cross correlation between China Construction Bank and Sinotrans Ltd Class, you can compare the effects of market volatilities on China Construction and Sinotrans 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 Sinotrans. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Sinotrans.
Diversification Opportunities for China Construction and Sinotrans
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sinotrans is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Sinotrans Ltd Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinotrans Class 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 Sinotrans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinotrans Class has no effect on the direction of China Construction i.e., China Construction and Sinotrans go up and down completely randomly.
Pair Corralation between China Construction and Sinotrans
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.82 times more return on investment than Sinotrans. However, China Construction Bank is 1.22 times less risky than Sinotrans. It trades about 0.09 of its potential returns per unit of risk. Sinotrans Ltd Class is currently generating about -0.01 per unit of risk. If you would invest 757.00 in China Construction Bank on September 28, 2024 and sell it today you would earn a total of 126.00 from holding China Construction Bank or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Sinotrans Ltd Class
Performance |
| Timeline |
| China Construction Bank |
| Sinotrans Class |
China Construction and Sinotrans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Sinotrans
The main advantage of trading using opposite China Construction and Sinotrans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Sinotrans 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 Sinotrans will offset losses from the drop in Sinotrans' long position.| China Construction vs. Harbin Air Conditioning | China Construction vs. Beijing Wandong Medical | China Construction vs. Inspur Software Co | China Construction vs. Ningbo MedicalSystem Biotechnology |
| Sinotrans vs. Ming Yang Smart | Sinotrans vs. 159681 | Sinotrans vs. 159005 | Sinotrans vs. Loctek Ergonomic Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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