Correlation Between China Construction and Hygon Information
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By analyzing existing cross correlation between China Construction Bank and Hygon Information Technology, you can compare the effects of market volatilities on China Construction and Hygon Information 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 Hygon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Hygon Information.
Diversification Opportunities for China Construction and Hygon Information
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Hygon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Hygon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hygon Information 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 Hygon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hygon Information has no effect on the direction of China Construction i.e., China Construction and Hygon Information go up and down completely randomly.
Pair Corralation between China Construction and Hygon Information
Assuming the 90 days trading horizon China Construction is expected to generate 2.92 times less return on investment than Hygon Information. But when comparing it to its historical volatility, China Construction Bank is 3.06 times less risky than Hygon Information. It trades about 0.09 of its potential returns per unit of risk. Hygon Information Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,139 in Hygon Information Technology on September 26, 2024 and sell it today you would earn a total of 9,936 from holding Hygon Information Technology or generate 240.06% 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. Hygon Information Technology
Performance |
| Timeline |
| China Construction Bank |
| Hygon Information |
China Construction and Hygon Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Hygon Information
The main advantage of trading using opposite China Construction and Hygon Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Hygon Information 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 Hygon Information will offset losses from the drop in Hygon Information's long position.| China Construction vs. Industrial and Commercial | China Construction vs. Kweichow Moutai Co | China Construction vs. Agricultural Bank of | China Construction vs. China Mobile Limited |
| Hygon Information vs. Industrial and Commercial | Hygon Information vs. Agricultural Bank of | Hygon Information vs. China Construction Bank | Hygon Information vs. Bank of China |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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