Correlation Between China Construction and Beken Corp
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By analyzing existing cross correlation between China Construction Bank and Beken Corp, you can compare the effects of market volatilities on China Construction and Beken Corp 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 Beken Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Beken Corp.
Diversification Opportunities for China Construction and Beken Corp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Beken is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Beken Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beken Corp 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 Beken Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beken Corp has no effect on the direction of China Construction i.e., China Construction and Beken Corp go up and down completely randomly.
Pair Corralation between China Construction and Beken Corp
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Beken Corp. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 3.75 times less risky than Beken Corp. The stock trades about -0.01 of its potential returns per unit of risk. The Beken Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,382 in Beken Corp on October 14, 2024 and sell it today you would earn a total of 962.00 from holding Beken Corp or generate 40.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Beken Corp
Performance |
| Timeline |
| China Construction Bank |
| Beken Corp |
China Construction and Beken Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Beken Corp
The main advantage of trading using opposite China Construction and Beken Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Beken Corp 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 Beken Corp will offset losses from the drop in Beken Corp's long position.| China Construction vs. Shandong Sinoglory Health | China Construction vs. FSPG Hi Tech Co | China Construction vs. De Rucci Healthy | China Construction vs. Shanghai Shibei Hi Tech |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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