Correlation Between China Construction and Qumei Furniture
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By analyzing existing cross correlation between China Construction Bank and Qumei Furniture Group, you can compare the effects of market volatilities on China Construction and Qumei Furniture 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 Qumei Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Qumei Furniture.
Diversification Opportunities for China Construction and Qumei Furniture
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Qumei is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Qumei Furniture Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qumei Furniture 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 Qumei Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qumei Furniture Group has no effect on the direction of China Construction i.e., China Construction and Qumei Furniture go up and down completely randomly.
Pair Corralation between China Construction and Qumei Furniture
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.4 times more return on investment than Qumei Furniture. However, China Construction Bank is 2.5 times less risky than Qumei Furniture. It trades about 0.09 of its potential returns per unit of risk. Qumei Furniture Group is currently generating about -0.03 per unit of risk. If you would invest 592.00 in China Construction Bank on September 12, 2024 and sell it today you would earn a total of 245.00 from holding China Construction Bank or generate 41.39% 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. Qumei Furniture Group
Performance |
| Timeline |
| China Construction Bank |
| Qumei Furniture Group |
China Construction and Qumei Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Qumei Furniture
The main advantage of trading using opposite China Construction and Qumei Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Qumei Furniture 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 Qumei Furniture will offset losses from the drop in Qumei Furniture'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 |
| Qumei Furniture vs. Lutian Machinery Co | Qumei Furniture vs. PetroChina Co Ltd | Qumei Furniture vs. Bank of China | Qumei Furniture vs. Gansu Jiu Steel |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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