Correlation Between China Construction and Qijing Machinery
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By analyzing existing cross correlation between China Construction Bank and Qijing Machinery, you can compare the effects of market volatilities on China Construction and Qijing Machinery 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 Qijing Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Qijing Machinery.
Diversification Opportunities for China Construction and Qijing Machinery
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Qijing is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Qijing Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qijing 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 Qijing Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qijing Machinery has no effect on the direction of China Construction i.e., China Construction and Qijing Machinery go up and down completely randomly.
Pair Corralation between China Construction and Qijing Machinery
Assuming the 90 days trading horizon China Construction is expected to generate 3.0 times less return on investment than Qijing Machinery. But when comparing it to its historical volatility, China Construction Bank is 1.78 times less risky than Qijing Machinery. It trades about 0.1 of its potential returns per unit of risk. Qijing Machinery is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Qijing Machinery on September 3, 2024 and sell it today you would earn a total of 299.00 from holding Qijing Machinery or generate 29.31% 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. Qijing Machinery
Performance |
| Timeline |
| China Construction Bank |
| Qijing Machinery |
China Construction and Qijing Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Qijing Machinery
The main advantage of trading using opposite China Construction and Qijing Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Qijing Machinery 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 Qijing Machinery will offset losses from the drop in Qijing Machinery's long position.| China Construction vs. DO Home Collection | China Construction vs. China National Software | China Construction vs. Guangdong Jingyi Metal | China Construction vs. Guocheng Mining Co |
| Qijing Machinery vs. Agricultural Bank of | Qijing Machinery vs. China Construction Bank | Qijing Machinery vs. Postal Savings Bank | Qijing Machinery vs. Bank of Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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