Correlation Between China Construction and Road Environment
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By analyzing existing cross correlation between China Construction Bank and Road Environment Technology, you can compare the effects of market volatilities on China Construction and Road Environment 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 Road Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Road Environment.
Diversification Opportunities for China Construction and Road Environment
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Road is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Road Environment Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Road Environment Tec 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 Road Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Road Environment Tec has no effect on the direction of China Construction i.e., China Construction and Road Environment go up and down completely randomly.
Pair Corralation between China Construction and Road Environment
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.48 times more return on investment than Road Environment. However, China Construction Bank is 2.08 times less risky than Road Environment. It trades about 0.09 of its potential returns per unit of risk. Road Environment Technology is currently generating about -0.07 per unit of risk. If you would invest 525.00 in China Construction Bank on November 2, 2024 and sell it today you would earn a total of 329.00 from holding China Construction Bank or generate 62.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Road Environment Technology
Performance |
| Timeline |
| China Construction Bank |
| Road Environment Tec |
China Construction and Road Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Road Environment
The main advantage of trading using opposite China Construction and Road Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Road Environment 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 Road Environment will offset losses from the drop in Road Environment's long position.| China Construction vs. Guangdong Liantai Environmental | China Construction vs. Shenzhen MYS Environmental | China Construction vs. Baoshan Iron Steel | China Construction vs. Holitech Technology Co |
| Road Environment vs. Industrial and Commercial | Road Environment vs. Agricultural Bank of | Road Environment vs. China Construction Bank | Road Environment 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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