Correlation Between China Construction and Huatai Securities
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By analyzing existing cross correlation between China Construction Bank and Huatai Securities Co, you can compare the effects of market volatilities on China Construction and Huatai Securities 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 Huatai Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Huatai Securities.
Diversification Opportunities for China Construction and Huatai Securities
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between China and Huatai is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Huatai Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huatai Securities 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 Huatai Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huatai Securities has no effect on the direction of China Construction i.e., China Construction and Huatai Securities go up and down completely randomly.
Pair Corralation between China Construction and Huatai Securities
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Huatai Securities. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 1.92 times less risky than Huatai Securities. The stock trades about -0.08 of its potential returns per unit of risk. The Huatai Securities Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,697 in Huatai Securities Co on September 13, 2024 and sell it today you would earn a total of 147.00 from holding Huatai Securities Co or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Huatai Securities Co
Performance |
| Timeline |
| China Construction Bank |
| Huatai Securities |
China Construction and Huatai Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Huatai Securities
The main advantage of trading using opposite China Construction and Huatai Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Huatai Securities 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 Huatai Securities will offset losses from the drop in Huatai Securities' long position.| China Construction vs. Eastroc Beverage Group | China Construction vs. Youyou Foods Co | China Construction vs. HaiXin Foods Co | China Construction vs. Shanghai Metersbonwe FashionAccessories |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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