Correlation Between China Construction and Mengtian Home
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By analyzing existing cross correlation between China Construction Bank and Mengtian Home Group, you can compare the effects of market volatilities on China Construction and Mengtian Home 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 Mengtian Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Mengtian Home.
Diversification Opportunities for China Construction and Mengtian Home
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Mengtian is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Mengtian Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mengtian Home Group 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 Mengtian Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mengtian Home Group has no effect on the direction of China Construction i.e., China Construction and Mengtian Home go up and down completely randomly.
Pair Corralation between China Construction and Mengtian Home
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.4 times more return on investment than Mengtian Home. However, China Construction Bank is 2.48 times less risky than Mengtian Home. It trades about 0.27 of its potential returns per unit of risk. Mengtian Home Group is currently generating about 0.02 per unit of risk. If you would invest 859.00 in China Construction Bank on January 25, 2025 and sell it today you would earn a total of 68.00 from holding China Construction Bank or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Mengtian Home Group
Performance |
| Timeline |
| China Construction Bank |
| Mengtian Home Group |
China Construction and Mengtian Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Mengtian Home
The main advantage of trading using opposite China Construction and Mengtian Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Mengtian Home 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 Mengtian Home will offset losses from the drop in Mengtian Home's long position.| China Construction vs. Bloomage Biotechnology Corp | China Construction vs. Anhui Xinhua Media | China Construction vs. Shanghai Xinhua Media | China Construction vs. SSAW Hotels Resorts |
| Mengtian Home vs. Lotus Health Group | Mengtian Home vs. Hangzhou Minsheng Healthcare | Mengtian Home vs. Yonyou Auto Information | Mengtian Home vs. Shandong Sinoglory Health |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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