Correlation Between China Construction and Anhui Huaheng
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By analyzing existing cross correlation between China Construction Bank and Anhui Huaheng Biotechnology, you can compare the effects of market volatilities on China Construction and Anhui Huaheng 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 Anhui Huaheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Anhui Huaheng.
Diversification Opportunities for China Construction and Anhui Huaheng
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between China and Anhui is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Anhui Huaheng Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Huaheng Biotec 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 Anhui Huaheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Huaheng Biotec has no effect on the direction of China Construction i.e., China Construction and Anhui Huaheng go up and down completely randomly.
Pair Corralation between China Construction and Anhui Huaheng
Assuming the 90 days trading horizon China Construction Bank is expected to generate 0.49 times more return on investment than Anhui Huaheng. However, China Construction Bank is 2.04 times less risky than Anhui Huaheng. It trades about 0.38 of its potential returns per unit of risk. Anhui Huaheng Biotechnology is currently generating about -0.12 per unit of risk. If you would invest 804.00 in China Construction Bank on September 29, 2024 and sell it today you would earn a total of 73.00 from holding China Construction Bank or generate 9.08% 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. Anhui Huaheng Biotechnology
Performance |
| Timeline |
| China Construction Bank |
| Anhui Huaheng Biotec |
China Construction and Anhui Huaheng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Anhui Huaheng
The main advantage of trading using opposite China Construction and Anhui Huaheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Anhui Huaheng 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 Anhui Huaheng will offset losses from the drop in Anhui Huaheng'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 |
| Anhui Huaheng vs. Industrial and Commercial | Anhui Huaheng vs. Agricultural Bank of | Anhui Huaheng vs. China Construction Bank | Anhui Huaheng 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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