Correlation Between China Construction and Bangyan Technology
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By analyzing existing cross correlation between China Construction Bank and Bangyan Technology Co, you can compare the effects of market volatilities on China Construction and Bangyan Technology 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 Bangyan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Bangyan Technology.
Diversification Opportunities for China Construction and Bangyan Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Bangyan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Bangyan Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangyan Technology 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 Bangyan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangyan Technology has no effect on the direction of China Construction i.e., China Construction and Bangyan Technology go up and down completely randomly.
Pair Corralation between China Construction and Bangyan Technology
Assuming the 90 days trading horizon China Construction is expected to generate 1.6 times less return on investment than Bangyan Technology. But when comparing it to its historical volatility, China Construction Bank is 6.69 times less risky than Bangyan Technology. It trades about 0.34 of its potential returns per unit of risk. Bangyan Technology Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,786 in Bangyan Technology Co on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Bangyan Technology Co or generate 6.89% 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. Bangyan Technology Co
Performance |
| Timeline |
| China Construction Bank |
| Bangyan Technology |
China Construction and Bangyan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Bangyan Technology
The main advantage of trading using opposite China Construction and Bangyan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Bangyan Technology 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 Bangyan Technology will offset losses from the drop in Bangyan Technology'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 |
| Bangyan Technology vs. Gansu Jiu Steel | Bangyan Technology vs. Shandong Mining Machinery | Bangyan Technology vs. Aba Chemicals Corp | Bangyan Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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