Correlation Between China Construction and Fuda Alloy
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By analyzing existing cross correlation between China Construction Bank and Fuda Alloy Materials, you can compare the effects of market volatilities on China Construction and Fuda Alloy 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 Fuda Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Fuda Alloy.
Diversification Opportunities for China Construction and Fuda Alloy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Fuda is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Fuda Alloy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuda Alloy Materials 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 Fuda Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuda Alloy Materials has no effect on the direction of China Construction i.e., China Construction and Fuda Alloy go up and down completely randomly.
Pair Corralation between China Construction and Fuda Alloy
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Fuda Alloy. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 2.49 times less risky than Fuda Alloy. The stock trades about 0.0 of its potential returns per unit of risk. The Fuda Alloy Materials is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,262 in Fuda Alloy Materials on September 5, 2024 and sell it today you would earn a total of 90.00 from holding Fuda Alloy Materials or generate 7.13% 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. Fuda Alloy Materials
Performance |
| Timeline |
| China Construction Bank |
| Fuda Alloy Materials |
China Construction and Fuda Alloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Fuda Alloy
The main advantage of trading using opposite China Construction and Fuda Alloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Fuda Alloy 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 Fuda Alloy will offset losses from the drop in Fuda Alloy's long position.| China Construction vs. Beijing Sanyuan Foods | China Construction vs. By health | China Construction vs. Everjoy Health Group | China Construction vs. Shandong Huifa Foodstuff |
| Fuda Alloy vs. Biwin Storage Technology | Fuda Alloy vs. PetroChina Co Ltd | Fuda Alloy vs. Industrial and Commercial | Fuda Alloy 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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