Correlation Between China Construction and Healthcare
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By analyzing existing cross correlation between China Construction Bank and Healthcare Co, you can compare the effects of market volatilities on China Construction and Healthcare 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 Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Healthcare.
Diversification Opportunities for China Construction and Healthcare
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Healthcare is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Healthcare Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare 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 Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare has no effect on the direction of China Construction i.e., China Construction and Healthcare go up and down completely randomly.
Pair Corralation between China Construction and Healthcare
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.53 times more return on investment than Healthcare. However, China Construction Bank is 1.89 times less risky than Healthcare. It trades about 0.07 of its potential returns per unit of risk. Healthcare Co is currently generating about -0.4 per unit of risk. If you would invest 830.00 in China Construction Bank on October 14, 2024 and sell it today you would earn a total of 15.00 from holding China Construction Bank or generate 1.81% 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. Healthcare Co
Performance |
| Timeline |
| China Construction Bank |
| Healthcare |
China Construction and Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Healthcare
The main advantage of trading using opposite China Construction and Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Healthcare 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 Healthcare will offset losses from the drop in Healthcare'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 |
| Healthcare vs. Chongqing Brewery Co | Healthcare vs. Jinhui Liquor Co | Healthcare vs. Holitech Technology Co | Healthcare vs. Eyebright Medical Technology |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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