Correlation Between China Construction and Senci Electric
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By analyzing existing cross correlation between China Construction Bank and Senci Electric Machinery, you can compare the effects of market volatilities on China Construction and Senci Electric 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 Senci Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Senci Electric.
Diversification Opportunities for China Construction and Senci Electric
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Senci is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Senci Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senci Electric Machinery 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 Senci Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senci Electric Machinery has no effect on the direction of China Construction i.e., China Construction and Senci Electric go up and down completely randomly.
Pair Corralation between China Construction and Senci Electric
Assuming the 90 days trading horizon China Construction is expected to generate 17.84 times less return on investment than Senci Electric. But when comparing it to its historical volatility, China Construction Bank is 2.64 times less risky than Senci Electric. It trades about 0.02 of its potential returns per unit of risk. Senci Electric Machinery is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,397 in Senci Electric Machinery on October 24, 2024 and sell it today you would earn a total of 451.00 from holding Senci Electric Machinery or generate 32.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Senci Electric Machinery
Performance |
| Timeline |
| China Construction Bank |
| Senci Electric Machinery |
China Construction and Senci Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Senci Electric
The main advantage of trading using opposite China Construction and Senci Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Senci Electric 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 Senci Electric will offset losses from the drop in Senci Electric's long position.| China Construction vs. Xinjiang Baodi Mining | China Construction vs. Sihui Fuji Electronics | China Construction vs. Techshine Electronics Co | China Construction vs. Shengda Mining Co |
| Senci Electric vs. Industrial and Commercial | Senci Electric vs. Agricultural Bank of | Senci Electric vs. China Construction Bank | Senci Electric vs. Bank of China |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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