Correlation Between China Construction and Eastern Communications
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By analyzing existing cross correlation between China Construction Bank and Eastern Communications Co, you can compare the effects of market volatilities on China Construction and Eastern Communications 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 Eastern Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Construction and Eastern Communications.
Diversification Opportunities for China Construction and Eastern Communications
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Eastern is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding China Construction Bank and Eastern Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Communications 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 Eastern Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Communications has no effect on the direction of China Construction i.e., China Construction and Eastern Communications go up and down completely randomly.
Pair Corralation between China Construction and Eastern Communications
Assuming the 90 days trading horizon China Construction Bank is expected to under-perform the Eastern Communications. But the stock apears to be less risky and, when comparing its historical volatility, China Construction Bank is 2.9 times less risky than Eastern Communications. The stock trades about -0.1 of its potential returns per unit of risk. The Eastern Communications Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Eastern Communications Co on September 4, 2024 and sell it today you would earn a total of 2.00 from holding Eastern Communications Co or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Construction Bank vs. Eastern Communications Co
Performance |
| Timeline |
| China Construction Bank |
| Eastern Communications |
China Construction and Eastern Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Construction and Eastern Communications
The main advantage of trading using opposite China Construction and Eastern Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Construction position performs unexpectedly, Eastern Communications 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 Eastern Communications will offset losses from the drop in Eastern Communications' long position.| China Construction vs. Henan Shuanghui Investment | China Construction vs. Servyou Software Group | China Construction vs. Hunan Investment Group | China Construction vs. Harbin Hatou Investment |
| Eastern Communications vs. Industrial and Commercial | Eastern Communications vs. China Construction Bank | Eastern Communications vs. Bank of China | Eastern Communications vs. Agricultural Bank of |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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