Correlation Between China Construction and Liaoning Port
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By analyzing existing cross correlation between China Construction Bank and Liaoning Port Co, you can compare the effects of market volatilities on China Construction and Liaoning Port 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 Liaoning Port. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Liaoning Port.
Diversification Opportunities for China Construction and Liaoning Port
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Liaoning is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Liaoning Port Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Port 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 Liaoning Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Port has no effect on the direction of China Construction i.e., China Construction and Liaoning Port go up and down completely randomly.
Pair Corralation between China Construction and Liaoning Port
Assuming the 90 days trading horizon China Construction is expected to generate 15.68 times less return on investment than Liaoning Port. But when comparing it to its historical volatility, China Construction Bank is 2.7 times less risky than Liaoning Port. It trades about 0.02 of its potential returns per unit of risk. Liaoning Port Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 148.00 in Liaoning Port Co on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Liaoning Port Co or generate 6.76% 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. Liaoning Port Co
Performance |
| Timeline |
| China Construction Bank |
| Liaoning Port |
China Construction and Liaoning Port Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Liaoning Port
The main advantage of trading using opposite China Construction and Liaoning Port positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Liaoning Port 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 Liaoning Port will offset losses from the drop in Liaoning Port's long position.| China Construction vs. Kweichow Moutai Co | China Construction vs. Shenzhen Mindray Bio Medical | China Construction vs. Jiangsu Pacific Quartz | China Construction vs. G bits Network Technology |
| Liaoning Port vs. Chengdu Kanghua Biological | Liaoning Port vs. Beijing Wantai Biological | Liaoning Port vs. Suzhou Novoprotein Scientific | Liaoning Port vs. Aluminum Corp of |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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