Correlation Between China Construction and Anhui Xinhua
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By analyzing existing cross correlation between China Construction Bank and Anhui Xinhua Media, you can compare the effects of market volatilities on China Construction and Anhui Xinhua 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 Anhui Xinhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Anhui Xinhua.
Diversification Opportunities for China Construction and Anhui Xinhua
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Anhui is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Anhui Xinhua Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Xinhua Media 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 Anhui Xinhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Xinhua Media has no effect on the direction of China Construction i.e., China Construction and Anhui Xinhua go up and down completely randomly.
Pair Corralation between China Construction and Anhui Xinhua
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.5 times more return on investment than Anhui Xinhua. However, China Construction Bank is 2.0 times less risky than Anhui Xinhua. It trades about 0.41 of its potential returns per unit of risk. Anhui Xinhua Media is currently generating about 0.08 per unit of risk. If you would invest 806.00 in China Construction Bank on September 28, 2024 and sell it today you would earn a total of 77.00 from holding China Construction Bank or generate 9.55% 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. Anhui Xinhua Media
Performance |
| Timeline |
| China Construction Bank |
| Anhui Xinhua Media |
China Construction and Anhui Xinhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Anhui Xinhua
The main advantage of trading using opposite China Construction and Anhui Xinhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Anhui Xinhua 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 Anhui Xinhua will offset losses from the drop in Anhui Xinhua's 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 |
| Anhui Xinhua vs. Biwin Storage Technology | Anhui Xinhua vs. PetroChina Co Ltd | Anhui Xinhua vs. Industrial and Commercial | Anhui Xinhua vs. China Construction Bank |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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