Correlation Between China Construction and Will Semiconductor
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By analyzing existing cross correlation between China Construction Bank and Will Semiconductor Co, you can compare the effects of market volatilities on China Construction and Will Semiconductor 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 Will Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Will Semiconductor.
Diversification Opportunities for China Construction and Will Semiconductor
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Will is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Will Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Will Semiconductor 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 Will Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Will Semiconductor has no effect on the direction of China Construction i.e., China Construction and Will Semiconductor go up and down completely randomly.
Pair Corralation between China Construction and Will Semiconductor
Assuming the 90 days trading horizon China Construction is expected to generate 1.03 times less return on investment than Will Semiconductor. But when comparing it to its historical volatility, China Construction Bank is 1.86 times less risky than Will Semiconductor. It trades about 0.19 of its potential returns per unit of risk. Will Semiconductor Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8,484 in Will Semiconductor Co on September 12, 2024 and sell it today you would earn a total of 1,405 from holding Will Semiconductor Co or generate 16.56% 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. Will Semiconductor Co
Performance |
| Timeline |
| China Construction Bank |
| Will Semiconductor |
China Construction and Will Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Will Semiconductor
The main advantage of trading using opposite China Construction and Will Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Will Semiconductor 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 Will Semiconductor will offset losses from the drop in Will Semiconductor's long position.| China Construction vs. China Petroleum Chemical | China Construction vs. PetroChina Co Ltd | China Construction vs. China Mobile Limited | China Construction vs. Industrial and Commercial |
| Will Semiconductor vs. Gansu Jiu Steel | Will Semiconductor vs. Shandong Mining Machinery | Will Semiconductor vs. Aba Chemicals Corp | Will Semiconductor vs. BlueFocus Communication Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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